Table 13-3 Consider the Following Firm Which Makes High-Performance Racing Bicycles. All

question 183

Multiple Choice

Table 13-3
Consider the following firm which makes high-performance racing bicycles. All costs are given in dollars. Output is shown on a monthly basis. The firm's fixed costs include a rent of $800 and a lease cost of $400 per month.

-Refer to Table 13-3. What is the average fixed cost for the month if ten bicycles are produced?

• A) $120
• B) $284.40
• C) $404.40
• D) $1200

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Definitions:

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.

Marginal Cost

Incremental expenditure incurred by manufacturing an additional unit of a product or service.

Selling Price

The price at which a product or service is sold to customers.

Marginal Cost

Expenditure incurred in producing an additional unit of a good or service.