Why does the unit cost decrease, when demand for their product increase? AND calculating market share of a company?
- GA41Lv 71 month ago
Because direct cost increase directly per unit, but indirect costs do not. Indirect cost would include things like rent. If I'm paying $1000 for rent and sell 1000 units, the cost for rent per unit is $1.00. If I sell 2000 units, the cost for rent per unit is $0.50. Market share would be calculated using the revenue from that particular market. If the total market demand is $10,000,000 and your company is selling $1,000,000 of product, then your share of the market is $1,000,000/$10,000,000 x 100 = 10% market share.