If the Cost of Production Per Unit Goes Down as the Quantity

question 50

True/False

If the cost of production per unit goes down as the quantity produced increases, small producers can be at a great cost disadvantage.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain unchanged regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Unit Variable Costs

The costs that vary directly with the production volume, per unit of output.

Total Cost

The aggregate monetary value of all materials, labor, overhead, and expenses spent on a project or production.

Net Income

The amount of money left after all expenses, taxes, and deductions have been subtracted from total revenue.