The Corner Market Has Fixed Costs of $1,600,depreciation of $1,200,a

question 31

Multiple Choice

The Corner Market has fixed costs of $1,600,depreciation of $1,200,a tax rate of 35%,and a cost of capital of 12%.Variable costs represent 67% of sales.What minimum level of sales must the market obtain to avoid a net loss on its income statement?

• A) $8,484.85
• B) $6,666.67
• C) $7,033.33
• D) $7,867.67

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Definitions:

Marginal Product

The extra output produced from using an additional unit of a specific input while keeping all other inputs unchanged.

Average Product

The output per unit of input, for example, the quantity of goods produced per labor hour, indicating overall productivity.

Workers

Individuals engaged in any form of economic activity or employment, contributing labor for the production of goods and services.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, keeping all other inputs constant.