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A Company's Sales Revenue Decreased by 15% from One Operating

Question 15

Essay

A company's sales revenue decreased by 15% from one operating period to the next.
Assuming no change in the prices of its inputs and outputs, by what percentage did:
a) Fixed costs change?
b) Unit variable costs change?
c) Total variable costs change?

Correct Answer:

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a) 0%. By definition, fixed co...

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