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Which best describes what happens to the variable cost per unit if it is within the relevant range?

A) It increases proportionately
B) It decreases proportionately
C) It remains constant
D) It becomes fixed"

User Guvanch
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1 Answer

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Final answer:

Within the relevant range, the variable cost per unit typically remains constant because it is an operating range where efficiency is steady, and input costs do not significantly fluctuate.

Step-by-step explanation:

The question pertains to the behavior of variable costs per unit within the relevant range of production. Variable costs are, as their name suggests, costs that vary with the level of output. These include costs associated with labor, as more output typically requires additional work hours or more employees, and raw materials. Within the relevant range, which implies a steady state of operating efficiency, variable costs per unit tend to stay constant. This stability occurs because within this range, firms do not encounter significant changes in input costs or productivity that would otherwise affect per-unit costs.

User Bhamlin
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