Assume the Price of Your Product Is $10

question 20

Essay

Assume the price of your product is $10.00. The variable cost per unit is currently $5.00 and fixed costs are $15,000 per month. Assume that the company can invest in some equipment that will reduce variable costs to $3.00 each, but the cost of financing the new equipment will increase fixed costs to $17,500 per month. Compare the breakeven points for these two different options. Assuming the firm believes it can sell 2,800 units of its product at the $10.00 price, which is the better choice?

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Definitions:

Occupy Movement

A global protest movement against social and economic inequality that began in 2011, best known for its initial occupation of Wall Street in New York City.

Protest Crowd

A gathering of individuals who come together to express dissent or demand action concerning social, political, or environmental issues, often in a public setting.

Demonstrations

Public gatherings or marches expressing support for or opposition to a cause or policy, often accompanied by the display of signs and vocal chanting.

Mass Hysteria

Occurs when people react to a real or imagined event with irrational or frantic fear.