What Is the Variable Cost of a Product If the Fixed

question 182

Multiple Choice

What is the variable cost of a product if the fixed costs associated with it total $6,000, the break even point is 300 units, and selling price is $45?

• A) $17
• B) $25
• C) $29
• D) $34
• E) $41

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the additional value created beyond the opportunity cost.

Normal Profit

The lowest amount of profit a business must earn to stay relevant in its market by covering the costs of missed opportunities.

Marginal Cost

The cost increase brought about by the production of an extra unit of a product or service.

Pure Monopolist

A market situation where a single company is the sole producer and seller of a product or service, without any close substitutes.