What Is the Break-Even Quantity for the Following Situation

question 68

Multiple Choice

What is the break-even quantity for the following situation?
FC = $1,200 per week
VC = $2 per unit
Rev = $6 per unit

• A)100
• B)200
• C)600
• D)1,200
• E)300

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Definitions:

Marginal Cost

The additional cost incurred in producing one more unit of a good or service.

Comparative Advantage

Comparative advantage occurs when a country, individual, or company can produce a good or service at a lower opportunity cost than others.

Geegaws

Decorative trinkets or gadgets, often considered unnecessary or frivolous.

Utility Function

An illustrative model that shows the way individuals prioritize various combinations of products based on their contentment levels.