In fact, in the example of the ice cream bar business in Chapter 2, we assumed the average variable cost of an ice cream bar would remain $0.30 per unit whether the operation sold a small volume or la...In fact, in the example of the ice cream bar business in Chapter 2, we assumed the average variable cost of an ice cream bar would remain $0.30 per unit whether the operation sold a small volume or large volume of ice cream bars. In that sense of the word, it seems awkward to call the production level Q* the capacity when the graph indicates that it is possible to produce at higher volume levels but just that the average cost per unit will be higher.
