If a Firm Can Sell a Product for $40

question 29

Multiple Choice

If a firm can sell a product for $40.00 each,then what is the volume needed to break-even if the fixed cost of production is $125,000.00 and labour and material costs are $30.00 per item?

• A)125,000
• B)12,500
• C)4,167
• D)3,250

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Definitions:

Patent

A legal document granting an inventor exclusive rights to produce, use, and sell an invention for a certain period of time.

Average Total Cost

The total cost of production (fixed and variable costs) divided by the number of units produced, representing the cost per unit.

Raw Materials

are the basic materials from which products are made, often used in manufacturing and production processes.

Production Process

The series of steps and operations involved in the production of goods or services.