Question

Suppose you are in the T-shirt business. The cost of your ink supplies increases as the quantity of T-shirts produced decreases. This means that ink is a _____.

A.) revenue
B.) fixed cost
C.) variable cost

Answer 1

I believe it would be a variable cost.

Answer 2

The correct answer would be C.) variable cost


Revenue is basically your income in a business and a fixed cost is the price on something no matter what. The cost doesn't change.

A variable cost changes with your output, in this case, the amount of T-shirts produced.