-Refer to Table 9

question 57

Multiple Choice

-Refer to Table 9.1.If the market price is $90,then for this firm to maximize profits it should produce ________ units of output.

• A) 3
• B) 4
• C) 5
• D) 6

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Definitions:

Margin of Safety

The difference between actual or expected sales and sales at the break-even point. It measures how close a company is to not covering its fixed costs.

Break-even Sales

The amount of revenue from sales that exactly covers the fixed and variable costs of producing and selling a product, with no profit or loss.

Pretax Net Income

The amount of money a company has earned before taxes are deducted.

Fixed Costs

Expenses that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance.