Fixed Costs Per Unit

question 52

Multiple Choice

Fixed costs per unit:

• A) Remain constant as activity levels increase
• B) Increase as activity levels increase
• C) Decrease as activity levels increase
• D) None of these are correct

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Definitions:

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not identical, leading to some degree of market power and price control.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power and product differentiation.

Economic Profit

A rephrased definition: The profit achieved after deducting both explicit and implicit costs, representing the true surplus from economic activities.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical.