Sweet Tooth Bakery Bakes and Sells Pies

question 93

Multiple Choice

Sweet Tooth Bakery bakes and sells pies.Sweet Tooth has annual fixed costs of $880,000 and a variable cost per pie of $7.50.Each pie sells for $15.50 each.The firm expects to sell 500,000 pies annually.What is the break-even point in pies?

• A) 190,440
• B) 280,000
• C) 200,000
• D) 110,000

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Definitions:

Price Elasticity

A measure of the sensitivity of quantity demanded or quantity supplied to changes in price, indicating how the quantity responds to price changes.

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price, over a specified period of time.

Midpoint Formula

A method used to calculate the elasticity of demand or supply, assessing the percentage change in quantity demanded or supplied relative to the percentage change in price.