Lee Company Manufactures and Sells Widgets for $2 Per Unit

question 54

Multiple Choice

Lee Company manufactures and sells widgets for $2 per unit.Its variable cost per unit is $1.70.Lee's total fixed costs are $10,500.How many widgets must Lee Company sell to break even?

• A) 5,250
• B) 6,176
• C) 35,000
• D) 52,500
• E) 61,760

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Definitions:

Market-clearing Wage

The pay rate where the amount of labor offered matches the amount of labor required.

Electronic Devices

Gadgets and equipment that operate by controlling the flow of electrons or other electrically charged particles.

Efficiency Wage Model

A theory suggesting that higher wages lead to increased productivity by attracting higher quality workers and motivating all workers to avoid being fired.

Level of Employment

Refers to the number of people employed in the economy at any given time, influencing overall economic output.