A Major Reason Why Henry Ford Was Able to Sell

question 5

Multiple Choice

A major reason why Henry Ford was able to sell the Model T for as little as $360 per car was

• A) advertising.
• B) an increase in the capital-labor ratio at Ford.
• C) an expanded number of versions of the car (for example, convertible, hardtop, sedan, and so on).
• D) cheap immigrant labor.
• E) longer workdays.

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Definitions:

Production Function

An economic model that describes the relationship between inputs used in production and the output of goods or services.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Variable Cost

Expenses that fluctuate based on the level of production or the amount of output.

Total Cost

The complete cost of producing a specific quantity of output, including both fixed and variable costs.