A Firm Sells Two Products,Regular and Ultra

question 133

Multiple Choice

A firm sells two products,Regular and Ultra.For every unit of Regular sold,two units of Ultra are sold.The firm's total fixed costs are $1,612,000.Selling prices and cost information for both products follow.What is the firm's break-even point in units of Regular and Ultra?

• A)31,000 Regular units and 31,000 Ultra units.
• B)31,000 Regular units and 62,000 Ultra units.
• C)10,333 Regular units and 20,667 Ultra units.
• D)36,167 Regular units and 72,333 Ultra units.
• E)62,000 Regular units and 31,000 Ultra units.

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Definitions:

Protective Tariff

A tariff imposed to protect domestic industries from foreign competition by increasing the cost of imported goods.

Free-Trade Zone

A designated area within a country where goods can be imported, stored, processed, and exported without the intervention of customs authorities.

North American Free Trade Agreement

An agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America aimed at reducing trading costs, increasing business investment, and helping North America be more competitive in the global marketplace.

Tariffs

Taxes imposed by a government on imported or exported goods, often used to protect domestic industries against foreign competition.