Assume a Sales Price Per Unit of $20, Variable Cost

question 36

Multiple Choice

Assume a sales price per unit of $20, variable cost per unit $16, and total fixed costs of $168,000.What is the breakeven point in dollars?

• A)$210,000
• B)$420,000
• C)$672,000
• D)$840,000

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on.

Natural Monopolies

A situation in which a single firm can supply a product or service to an entire market at a lower cost than could two or more firms, leading to a market structure where only one business exists.

Service The Market

involves addressing the needs and desires of a particular market segment by offering products, services, or solutions that cater specifically to that segment's demands.

Negative Externalities

Uncompensated adverse effects that an individual or firm's activity imposes on others, not accounted for in the market price.