Suppose that a firm has an average variable cost of $52.50 when producing 120 units of output. What is the firm's total variable cost?
What will be an ideal response?
Because average variable cost is equal to total variable cost divided by the number of units of output, this means that the firm's total variable cost must be equal to its average variable cost multiplied by the number of units of output. Therefore, total variable costs are equal to ($52.50)(120) = 6,300 .
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When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
A) inelastic. B) perfectly inelastic. C) elastic. D) unit elastic.
Businesses need to direct their product marketing strategies to the individuals most likely to purchase it. Often marketing managers examine potential markets for their possible effects on the firm's sales, costs, and profits. Which of the following is the designation given for the group to which marketing managers direct the focus of their marketing efforts for a product?
a. Potential market b. Mixed market c. Target market d. Market segment