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A Test Market Refers to the People in a Market

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A test market refers to the people in a market that will be least likely to use the product or service the marketer is offering.


Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as more units are produced.

Price Taker

An economic entity that does not have the market power to set the price of a good or service but must accept the market price as given.

Market Price

The present rate at which a service or asset is available for purchase or sale in a market.

Average Variable Cost

The total variable cost divided by the number of units produced.

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