At 50 Units of Output, a Firm's Average Variable Cost

question 179

Multiple Choice

At 50 units of output, a firm's average variable cost is $30.Therefore, its:

• A) average total cost is $30.
• B) average total cost is greater than $30.
• C) average total cost is less than $30.
• D) marginal cost is $30.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the time required to recoup the investment in a project, by taking into account the present value of expected cash flows.

Financial Break-Even

The sales level that results in a zero NPV.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes towards covering fixed costs and generating profit.

Accounting Break-Even

Accounting Break-Even is the point at which total revenues equal total expenses (including both fixed and variable costs), resulting in neither profit nor loss.