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Betty and David Decide to Conduct a Survey to Observe

question 28

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Betty and David decide to conduct a survey to observe people's reaction to their innovative idea for a new product.With the help of an organization that conducts primary research,the couple is able to acquire responses of people from their town with a population of less than 500.The results are very encouraging and they decide to start their company.What error have they committed?


Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace.

Average Variable Cost

The total variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.

Profit Maximization

The method used by a company to establish the price and quantity of production that generates the maximum profit.

Lowest Output

The minimum amount of goods or services produced by an entity under given conditions.

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