If the Fixed Costs of Manufacturing a New Cell Phone

question 87

Multiple Choice

If the fixed costs of manufacturing a new cell phone are $10,000,the sales price is $60,and variable cost per unit is $20,the break-even point is

• A) 100 units.
• B) 4,000 units.
• C) 20 units.
• D) 1,000 units.
• E) 250 units.

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Definitions:

Long-Run Supply Curve

A graphical representation showing the quantities of a good a firm is willing to supply at different prices over a period when all input levels can be varied.

Increasing-Cost Industry

An industry in which the costs of production increase as the industry expands, typically due to factors such as input limitations or regulation.

Pure Competition

An idealized market structure featuring numerous buyers and sellers, free entry and exit, and completely homogeneous products, resulting in the inability of any single firm to influence the market price.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a long period, taking into account all possible changes in inputs and technology.