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What Is Usage-Rate Segmentation? What Is the 80/20 Principle,and How

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What is usage-rate segmentation? What is the 80/20 principle,and how does it apply to usage-rate segmentation?

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Definitions:

Variable Costs

Charges that adjust directly in response to the quantity of production or output.

Average Total Cost

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

Marginal Cost

The outgoings associated with the production of one more unit of a product or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with the level of output.

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