The Difference Between the Projection of the Path to Reach

question 240

Multiple Choice

The difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place is referred to as the

• A)planning gap.
• B)contribution margin.
• C)point of difference.
• D)break-even point.
• E)sales response function.

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Definitions:

Average Fixed Cost

The fixed costs of production (costs that do not vary with the level of output) divided by the quantity of output produced.

Marginal Cost

The increase in total cost that arises when the quantity produced is incremented by one unit.

Profit-maximizing Rule

The principle that firms maximize their profits by producing at a level where marginal costs equal marginal revenues.

Marginal Revenue

The increased earnings a business obtains from the sale of one extra item or service.