Smitty's Smoothies Has Fixed Costs of $1600 Per Month

question 114

Multiple Choice

Smitty's Smoothies has fixed costs of $1600 per month.The only variable costs Smitty incurs are for the ingredients and labour needed to produce smoothies.These cost $1.50 per drink.Smitty sells his delicious concoctions for $3.50 each.Which of the following statements is correct?

• A)Smitty will maximize his profits at a sales volume of 560 smoothies per month.
• B)Smitty will be able to earn a profit if he can sell more than 400 smoothies each month.
• C)Regardless of sales volume, Smitty will never be able to earn a profit under these conditions. In order to stay in business, he must raise his price to at least $4 per smoothie.
• D)In order to break even, Smitty must sell at least 800 smoothies each month.

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Definitions:

Defamation

The act of making false statements that harm another person's reputation.

Actual Malice

In defamation, either a person’s knowledge that his or her statement or published material is false or the person’s reckless disregard for whether it was false.

Defamation

Defamation is the act of making false statements about another person that cause harm to their reputation.

Actual Malice

A standard of proof in defamation law that requires the plaintiff to show that the defendant knowingly published false information or did so with reckless disregard for the truth.