Based on the Following Cost Data,items Labeled (A)and (B)in the Table

question 81

Multiple Choice

Based on the following cost data,items labeled (a) and (b) in the table below are which of the following amounts,respectively? $\begin{array}{lrr} \text { Number of units: } &1,500&3,000\\ \text { Total cost: } &\\ \text { Variable} &\$7,500&\$15,00\\ \text { Fixed} &\$6,000&\$6,000\\\\ \text { Cost per unit:} &\\ \text { Variable } &\$5&(a) \\ \text { Fixed }&\$4&(b) \end{array}$

• A) (a) = $3.00; (b) = $3.00
• B) (a) = $5.00; (b) = $4.00
• C) (a) = $2.50; (b) = $2.00
• D) (a) = $5.00; (b) = $2.00

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Definitions:

Marginal Revenue

The extra revenue earned from the sale of an additional unit of a product or service.

Maximize Profits

The process by which a firm adjusts its production and pricing strategies to earn the highest possible profit.

Economic Profits

Profits calculated by subtracting both the explicit and implicit costs of production from total revenues.

Monopolistically Competitive

Describes a market type where numerous sellers offer differentiated products, leading to competitive yet non-homogeneous markets.