Based Upon the Results of the Concept Test and Considerable

question 79

Multiple Choice

Based upon the results of the concept test and considerable managerial judgement, estimates of sales, costs and profits will be made. This stage is called which of the following?

• A)The commercialization stage
• B)The business analysis stage
• C)The market testing stage
• D)The screening stage

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Definitions:

Average Variable Cost

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

Shutdown Point

The level of output and price at which a firm's total revenue just covers its variable costs; below this point, the firm would cease production.

Maximizing Losses

Contrary to economic rationality, refers to theoretical actions or strategies that would lead to the greatest possible financial losses.

Diminishing Returns

A principle stating that as more investment is made in a particular resource, the marginal gain in output will eventually decrease.