Answer the Following Questions Using the Information Below

question 2

Multiple Choice

Answer the following questions using the information below:
Nancy's Niche sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue, $20,000 of variable costs, and $10,000 of fixed costs.
-If variable costs decrease by $1 per unit, the new breakeven point is:

• A)1,539 units.
• B)492 units.
• C)$11,765 in total sales dollars.
• D)None of these answers are correct.

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Definitions:

Demand Curve

A graph showing the relationship between the quantity of a goods or services demanded and its price, usually downward sloping.

Price Increase

A rise in the cost of goods or services over time, affecting the purchasing power of money.

Money Income

The total amount of monetary earnings or receipts accrued by an individual or household in a given time period.

Market Demand Curve

A graphical representation showing the quantity of a good that all consumers in a market are willing to buy at each price level.