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Which of the following is a correct pairing?

A) Variable cost per unit; Total contribution margin
B) Contribution margin ratio; Selling price per unit
C) Total fixed cost; Contribution margin per unit
D) Selling price per unit; Variable cost ratio

User Esco
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1 Answer

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Final answer:

Costs measured on a per-unit basis are average total cost, average variable cost, variable costs, and marginal cost. Marginal costs, which tend to rise, help firms decide if additional production is profitable. Production technology is the method of transforming inputs into outputs, influencing costs and production efficiency. (Option B).

Step-by-step explanation:

Costs measured on a per-unit basis include average total cost, average variable cost, variable costs, and marginal cost. Fixed costs are measured on a total basis and do not change with the level of production. Average costs (total costs divided by the number of units produced) and variable costs (costs that vary with the level of production) are often expressed on a per-unit basis.

Marginal cost is calculated by taking the change in total cost or variable cost and dividing it by the change in output for each possible change in output. Marginal costs typically rise as output increases. These costs are crucial for firms to consider when deciding whether the additional unit produced is adding to the firm's profit.

In the context of production, production technology refers to the methods and processes used to transform inputs (like raw materials and labor) into outputs (goods or services). It affects the type and amount of inputs needed and the volume of output that can be produced, implying the firm's cost structure and the efficiency of production. (Option B).

User Michal Dobrodenka
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