ECONOMICS
ENTREPRENEURS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the equilibrium quantity on a supply curve
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how many items an entrepreneur has for sale
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the profit or loss associated with a unit of sale
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foreign demand for an entrepreneur’s product
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Detailed explanation-1: -Simply put, unit economics are a measure of the profitability of selling/producing/offering one unit of your product or service. If you’re a widget company selling widgets, the unit economics will be a relationship between the revenue you receive from selling a widget and all the costs associated with making that sale.
Detailed explanation-2: -In unit economics, we can define a unit in two ways: “One unit = one customer”: Typically, the ratio of a customer’s lifetime value (LTV) to the costs to acquire that customer (CAC). “One unit = one item sold”: The incremental profit a company makes when it sells a single unit of its product.
Detailed explanation-3: -Economic profit (or loss) can be calculated as revenue minus explicit costs minus opportunity cost.
Detailed explanation-4: -Definition: Economics of One Unit (EOU) is a method used to determine whether a business model can be successful (profitable), by calculating if an individual unit of the good or service would be profitable.
Detailed explanation-5: -Subtract the cost of the product from the sale price of the item. For example, if you sell an item for $40 and it costs your company $22, your profit per unit equals $18.