The Average Price Washburn Charges for a Guitar Is $329

question 111

Multiple Choice

The average price Washburn charges for a guitar is $329.This price must cover its average costs of $25 for materials and $112 for direct labour.It must also cover fixed expenses of $32,000.Assuming everything else stays the same,the company's planned move to Nashville,Tennessee,will reduce its fixed costs by $4,800.This would cause the slope of the total cost curve to _____ and the break-even quantity to _____.

• A)decrease; stay the same
• B)decrease; increase
• C)increase; increase
• D)stay the same; increase

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