The Fixed Costs for the Manufacture of Hand-Made Ceramic Planters

question 27

Multiple Choice

The fixed costs for the manufacture of hand-made ceramic planters are $21,000. The variable costs to manufacture 10 planters are $800. If the potter has to sell 700 units to break even, what is the selling price of the planters?

• A) 21
• B) 30
• C) 80
• D) 110

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Definitions:

Retained Earnings

Profits that a company keeps or reinvests after dividends are paid out to shareholders, instead of distributing them completely.

Optimal Market Structure

A market configuration that maximizes efficiency and consumer welfare, often characterized by competitive markets, absence of monopolies, and minimal barriers to entry.

Technological Advance

The development of new technologies or the improvement of existing ones, which can lead to increased efficiency, productivity, and economic growth.

Oligopolistic Firms

Companies that operate in an oligopoly, a market structure characterized by a small number of firms controlling the majority of the market share.