Final answer:
Companies with high fixed costs and low marginal costs, like an internet company providing medical advice, are likely to have a linear relationship between costs and activities. This relationship typically holds up to a capacity limit, after which costs may rise non-linearly.
Step-by-step explanation:
The question asks about the relationship between costs and activities, which is likely to exhibit a linear relationship. A scenario that typically demonstrates a linear relationship is where a company has high fixed costs but low marginal costs. An example of such a company would be an internet company providing medical advice, where initial setup costs are high, but once operational, the variable costs of providing the service to additional customers are relatively low.
This linear cost behavior often holds up to a certain point of capacity, beyond which additional investments or variable costs become necessary, creating a non-linear increment in cost.
Practice Test 4 Solutions 12.1 Linear Equations also presents examples of linear equations that are analogous to understanding how costs can be modelled linearly. For instance, a business that charges a fixed rate plus a variable rate depending on a service parameter (e.g., the number of students in a class).