The per-unit cost of an item is its average total cost (= total cost/quantity).

Question

The per-unit cost of an item is its average total cost (= total cost/quantity). Suppose that a new cell phone application costs $200,000 to develop and only $0.7 per unit to deliver to each cell phone customer.

What will be the per-unit cost of the application if it sells 100 units?

Instructions: Round your answer to two decimal places.

Per-unit cost = $

What will be the per-unit cost of the application if it sells 1000 units?

Instructions: Round your answer to two decimal places.

Per-unit cost = $

What will be the per-unit cost of the application if it sells 1 million units?

Instructions: Round your answer to two decimal places.

Per-unit cost = $

Explanation / Answer

for 100 units average cost = ( 200,000+100*0.5)/100 =$2000.5 (answer) for 1000 units average cost =(200,000 +1000*0.5)/1000 = $200.5 (answer) for 1,000,000 units average cost = (200,000 +1,000,000*0.5)/1,000,000 = $0.7 (answer)

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