When Super Stuff Corporation Produces 5,000 Units, Total Costs Equal

question 62

Multiple Choice

When Super Stuff Corporation produces 5,000 units, total costs equal $150,000 and total variable costs equal $75,000. At this level of output, what is Super Stuff's average fixed cost?

• A) $75,000
• B) $30
• C) $225,000
• D) $15

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Definitions:

Fixed Price

A fixed price is a set cost for goods or services that does not change in response to market fluctuations or differing quantities purchased.

Common Stock

Type of equity security that represents ownership in a corporation, with rights to vote on corporate matters and share in dividends.

Real Goods

Real goods refer to physical, tangible products and commodities that can be touched, used, and traded, in contrast to services or digital products.

Option Delta

The change in the stock price divided by the change in the call price.