_____ Are Costs That a Customer Faces by Buying a Product

question 209

Multiple Choice

_____ are costs that a customer faces by buying a product that is different from what has been purchased or used in the past.

• A) Marginal costs
• B) First-mover costs
• C) Switching costs
• D) Pioneering costs
• E) Opportunity costs

Calculate the total cost of production at different levels of output.

Determine the cost formula for specific business scenarios using the high-low method.

Identify the characteristics and application of least squares regression in cost estimation.

Define the role of direct materials in activity-based costing.

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Definitions:

ATC Curve

The Average Total Cost curve graphically represents the total cost per unit of output produced, calculated by dividing the total cost by the quantity of output.

Economic Profits

The total revenue of a business minus its explicit and implicit costs; it’s a measure of excess above the normal levels of profits businesses earn in a competitive environment.

Long-Run Equilibrium

A state in which supply equals demand, all firms are maximizing profits, and there is no incentive for market entry or exit.

Efficient Output

The level of production at which a firm or economy can produce the maximum amount of goods at the lowest possible cost.