Question

When speaking of value creation per unit, we have variables V, C, and P. What do each stand for?

a. Volume, Cost, Profit
b. Value, Customer Satisfaction, Profit
c. Variable Costs, Fixed Costs, Profit Margin
d. Value Added, Cost Incurred, Profit Realized

Answer 1

The variables V, C, and P in value creation per unit represent Value Added, Cost Incurred, and Profit Realized. Calculations like average cost, average variable cost, variable costs, and marginal cost are measured per unit to assess efficiency and profitability in production.

Step-by-step explanation:

When speaking of value creation per unit, the variables V, C, and P stand for Value Added, Cost Incurred, and Profit Realized, respectively. These terms relate to the concept of how much value is created through production after accounting for the costs of the inputs.

Specific costs that are measured on a per-unit basis include average cost, average variable cost, variable costs, and marginal cost. A production technology, on the other hand, refers to the methods or processes used to convert inputs into outputs in the production of goods or services.