Which of the following is a cost that represents a variable cost for a clothing factory whose labor needs to fluctuate as production is increased and decreased each week?

Question

Fabric costs

Oligopoly

Electric bill

Rent on factory

Answer 1

The cost that represents a variable cost for a clothing factory, where labor needs to fluctuate with production levels, is fabric costs. Variable costs change with the level of production; as production increases, more fabric is needed, and as production decreases, less fabric is required. The other options, like rent on the factory, are fixed costs, while the oligopoly refers to a market structure rather than a specific cost, and the electric bill could have both fixed and variable components but does not directly reflect the fluctuating labor needs related to production levels.