The Table Below Shows Cost Data for a Firm That

question 131

Multiple Choice

The table below shows cost data for a firm that is selling in a purely competitive market. Refer to the above cost chart.Which output level will the firm never produce?

• A) 10
• B) 12
• C) 16
• D) 20

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Definitions:

Target Profit

The profit a company aims to achieve for a specific period.

Unit Sales

The quantity of items sold by a company during a specific period, not accounting for returns or refunds.

Break-Even Sales

The amount of revenue required to cover both the variable and fixed costs of a business, resulting in neither profit nor loss.

Margin Of Safety

The difference between actual sales and sales at the break-even point, providing a cushion that measures the business's ability to withstand sales fluctuations.