LL Company Produces and Sells a Product That Has Variable

question 106

Multiple Choice

LL Company produces and sells a product that has variable costs of $9 per unit and fixed costs of $200,000 per year.If production decreases from 50,000 to 40,000 units,the total cost per unit will ________.

• A) increase by $1
• B) increase by $13
• C) decrease by $1
• D) decrease by $14

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, representing the trade-off between the two goods.

Consumption Possibilities Frontier

A curve depicting all possible combinations of two goods or services that a consumer can purchase given their income and the prices of the goods.

Self-sufficient Producer

An individual or entity that produces all they need to consume, relying minimal on external sources for goods or services.

Pastrami

A delicacy of highly seasoned, smoked, and cooked beef or sometimes turkey, popular in deli cuisine.