The Total Fixed Costs Are $10,000, and the Average Variable

question 88

Multiple Choice

The total fixed costs are $10,000, and the average variable cost per unit is $3. For a production volume of 10,000 units, the average cost per unit is

• A) $3.00
• B) $1.00
• C) $4.00
• D) $3.30
• E) $10.00

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Definitions:

Competitive Advantage

An advantage that a company has over its competitors, allowing it to generate greater sales or margins and/or attract & retain more customers.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship.

Market Segmentation

The strategy of dividing a broad target market into subsets of consumers with common needs, preferences, or characteristics, to then target them more effectively.

Effectively Segmented

Refers to a market that has been divided into distinct groups of buyers with different needs, characteristics, or behaviors, which may require separate products or marketing strategies.