(Figure: Price and Quantity of Output I) at a Market

question 107

Multiple Choice

(Figure: Price and Quantity of Output I) At a market price of $27, the firm is willing to supply ____ units of the good.

• A) 8
• B) 7
• C) 5
• D) 0

---

Definitions:

Fixed Expenses

Costs that do not fluctuate with the volume of business or level of activity within a short period.

Breakeven Point

When the expenses and the revenue are equal, so that there is no profit or loss.

Expense Function

A mathematical expression that describes how costs change with variations in the volume of activity.

Expense Functions

Mathematical formulas used to describe the relationship between expenses and other variables such as production or sales volume.