The Rate of Change of Total Revenue from Selling One

question 15

Multiple Choice

The rate of change of total revenue from selling one more unit of a product is its:

• A) average revenue
• B) the firm's demand curve
• C) price elasticity of demand
• D) total revenue
• E) marginal revenue

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Definitions:

Carrying Cost

This is the total cost of holding inventory, including storage, handling, insurance, and opportunity costs.

Fixed Cost

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.