The _____ Is an Approach to Estimating the Different Components

question 22

Multiple Choice

The _____ is an approach to estimating the different components that make up the supplier's per unit price per unit of product or service, i.e., what the product or service should cost in a theoretical world.

• A)market skimming model
• B)make-buy analysis
• C)competition pricing model
• D)rate-of-return model
• E)Should-cost model

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Definitions:

Accounting Profit

The calculated income of a business or company after subtracting all explicit costs from total revenues.

Average Variable Cost

Calculated by dividing the total variable costs by the quantity of output produced, representing the variable cost per unit of output.

MR = MC

The condition where marginal revenue equals marginal cost, often used to determine the profit-maximizing output level for a firm.

Total Revenue

The entire amount of income received by a company from its sales of goods or services before any expenses are subtracted.