O'Boyle Co

question 114

Multiple Choice

O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sale units?

• A)12,800 units
• B)4,571 units
• C)16,000 units
• D)7,111 units

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Definitions:

Complements

Goods or services that are used together, where an increase in demand for one leads to an increase in demand for the other.

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in consumers’ income.

Normal Good

A type of good for which demand increases as consumer income rises, and decreases as consumer income falls.

Income Elasticity

Income elasticity of demand measures how much the quantity demanded of a good changes as consumer income changes.