A Firm Is Considering Whether to Continue to Buy a Particular

question 85

Multiple Choice

A firm is considering whether to continue to buy a particular component or to make the component themselves. There is no fixed cost associated with buying the component, but each component costs $17 to purchase. If the firm makes the component, it will incur a fixed cost of $5,000, but will be able to produce each component for $10. What is the break-even quantity?

• A) 500 units
• B) 7 units
• C) 714.3 units
• D) 294.1 units

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Definitions:

Frown

A facial expression characterized by a furrowing of one's eyebrows, often indicating displeasure or concentration.

Extrinsic Muscles

Muscles that originate outside of the body part they act upon, often providing gross motor function.

Lateral Rectus

A muscle located in the eye that functions to rotate the eyeball away from the body's central line.

Inferior Obliques

Muscles located beneath the eyes that help control eye movement, particularly elevating the eye when looking inward or outward.