Question
To help determine whether your business will be profitable, calculate the Select one: a. difference between the costs and profits for one unit b. economics of one unit c. cost of goods sold d. marginal cost of one unit
Ask by Hampton Patel. in the United States
Feb 03,2025
Real Tutor Solution
Tutor-Verified Answer
Answer
To determine your business's profitability, calculate the difference between the costs and profits for one unit.
Solution
To determine whether your business will be profitable, you need to assess the profitability on a per-unit basis. This involves calculating the **difference between the costs and profits for one unit**.
Here's why the other options are less suitable:
- **b. Economics of one unit**: This is too vague and doesn't specify what financial metrics to analyze.
- **c. Cost of goods sold (COGS)**: While COGS is an important component of your expenses, it alone doesn't provide a complete picture of profitability.
- **d. Marginal cost of one unit**: Marginal cost refers to the cost of producing one additional unit, which is useful for pricing and production decisions but doesn't directly indicate overall profitability.
**Therefore, the best option is:**
**a. difference between the costs and profits for one unit**
Reviewed and approved by the UpStudy tutoring team
Like
error msg
Explain 
Simplify this solution Beyond the Answer
Understanding the economics of one unit can be a game-changer! By analyzing each unit's revenue and costs, you can assess what drives your profits and where you might need adjustments. This concept is fundamental to make informed decisions on pricing, production levels, and improving overall efficiency to boost profitability. When calculating the marginal cost of one unit, remember it’s all about the extra expense incurred from producing one more unit! This insight helps businesses figure out if the additional units will provide enough profit to cover those costs, ensuring they avoid overproduction or underpricing. Keep that margin sweet!
