Why are there discontinuities (areas where the curve jumps up or down and is not smooth) in the total cost curve in the quantity discount model?
What will be an ideal response?
The total cost curve has breaks due to the price breaks. Reading the total cost curve from left to right, when purchase quantities reach a price break, an increase in one unit will trigger a per-unit decrease in price for all units in the order, which accounts for the reduction in total cost.
You might also like to view...
Discuss the hierarchical database model. What limitation(s) of the hierarchical database model are solved by the network database model?
Why is ethics training becoming more prevalent in companies?
What will be an ideal response?
What is a gratuitous promise?
A) a promise for which no consideration has been given B) a promise which concerns an illegal subject matter C) a promise which concerns a subject matter contrary to public policy D) a promise for which inadequate consideration has been given E) a promise made to give a tip to a waitress at a restaurant
Refer to Table 15-1. Bags of tea are sampled to ensure proper weight. The overall average for the samples is 8 ounces. Each sample contains 10 bags. The average range is 0.1 ounces. What is the lower limit of the sample averages chart?
A) 7.9692 B) 8.0308 C) 7.9076 D) 8.0924 E) None of the above