SU 9 - CVP Analysis Flashcards
1
Q
Define Marginal Revenue
A
The additional/incremental revenue produced by one additional unit of output
2
Q
Define Marginal Cost
A
The additional/incremental cost to produce one additional unit of output
3
Q
Define (the point) Profit Maximization
A
Where Marginal cost = marginal revenue
4
Q
The effect of Increased output on
Avg Fixed Cost
Avg Variable Cost
Avg Total Cost
A
AFC decreases as output increases
AVC and ATC decreases rapidly and then increases gradually
5
Q
Define a purely competitive market
A
A large number of buyers and seller that act independently and sell a homogeneous or standardized product
