Question

Which of the following statements is true of flexible resources?

a.They are not fully utilized and always have unused capacity.
b.They are supplied as used and needed.
c.The cost of a flexible resource is a fixed cost.
d.The quantity of the resource supplied is more than the quantity demanded.

Answer 1

Flexible resources are supplied as used and needed and are considered variable costs that a business can adjust to meet the current level of production demand. Fixed costs, by contrast, remain constant regardless of production levels.

Step-by-step explanation:

When we examine costs in the context of a business, we can categorize them into two main types: fixed costs and variable costs. Flexible resources, linked to the options available for the question, refer to the resources a company can adjust in the short term to meet the current level of demand.

Fixed costs, as the term implies, do not vary with the level of production. Examples include rent or a lease on a factory or business space; these costs are obligated once you agree to them and remain consistent regardless of production volume. The cost of a flexible resource, unlike fixed costs, is variable and will fluctuate based on the quantity needed and used during production. Hence, flexible resources are variable costs.

The true statement about flexible resources is: b. They are supplied as used and needed. Flexible resources are procured or utilized in accordance with production demands, contributing to variable costs. They can be scaled up or down to align with the current level of business activity, rather than representing unused capacity, fixed costs, or being in excess of demand.