If the Price of a Bottle of Orange Juice in the Downtown

question 185

Multiple Choice

If the price of a bottle of orange juice in the downtown area is $0.50 per bottle and, at that price, each of the 10,000 people working in the downtown area wants to buy two bottles of orange juice per day, the quantity demanded in the downtown orange juice market would be

• A)5,000 bottles per day.
• B)10,000 bottles per day.
• C)15,000 bottles per day.
• D)20,000 bottles per day.

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity of output produced, representing the per-unit cost of production.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced. This decreases as production increases.

Total Variable Costs

Expenses that change in proportion to the activity of a business such as materials, labor, and utilities, which vary with the level of output.

Average Fixed Cost

Production's fixed expenses (unchanged by the amount of production) split by the quantity of product made.