A Printing Company Determines That to Print a Large Format

question 220

Multiple Choice

A printing company determines that to print a large format poster it costs $75 to set up the production process. Each poster that is printed costs $25 in material and labor. The printing company sells these posters to marketing firms for $58 each. Determine the number of posters the printing company must sell to break even. [Note: profit = revenue - cost]

• A) 75 posters
• B) 0 posters
• C) 3 posters
• D) 2 posters
• E) 33 posters

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Definitions:

Production Function

An equation, table, or graph that indicates the maximum output a firm can produce with a given set of inputs, under certain technological constraints.

Returns To Scale

The rate at which production output increases in response to a proportional increase in all inputs (labor, capital, etc.).

Production Function

An equation that describes the relation between inputs used in production and the output resulting from their use.

Input

Resources used in the process of production, including labor, materials, and capital.