Question

What would the owner of the lemonade stand be doing if he or she bought lemons directly from the farmer?

A) making a loss
B) increasing variable costs
C) producing a service
D) decreasing variable costs

Answer 1

Answer: D. decreasing variable costs

Explanation: By purchasing the lemons directly from the source the owner is lowering the costs of hiring someone to do it for them. This causes a decrease in variable costs.