A Car Parts Company Decides to Discontinue the Production of Its

question 84

Multiple Choice

A car parts company decides to discontinue the production of its lowest-selling products and instead focuses on its areas of expertise. The company innovated a new automobile product with unique value. This is an example of using its

• A)competitive advantage.
• B)core competency.
• C)market power.
• D)management skills.
• E)management strategies.

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Definitions:

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit of output.

Average Variable Cost

The cost of labor, material, or overhead that changes in direct proportion to the level of production or output.

Total Cost

The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

Fixed Cost

A fixed cost is a business expense that remains constant regardless of the volume of goods or services produced by an entity.