If a Firm Has Fixed Costs of $20,000,variable Cost Per

question 32

Multiple Choice

If a firm has fixed costs of $20,000,variable cost per unit of $0.50,and a break-even point of 5,000 units,the price is:

• A) $2.50.
• B) $5.00.
• C) $4.00.
• D) $4.50.

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Definitions:

Unit Tax

A tax that is imposed on a product based on a fixed amount per unit, rather than a percentage of the price.

Output

The cumulative quantity of products or services generated by a business, sector, or economic system over a given timeframe.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain it.

Demand Schedule

A table or graph showing the quantity of a product that consumers are willing and able to purchase at various prices during a specified period.