Besser Ltd's Contribution Margin Per Unit Is $2 and the Break-Even

question 45

Multiple Choice

Besser Ltd's contribution margin per unit is $2 and the break-even number of units is 2000.If Besser Ltd sell 5000 units their profit will be:

• A) $2000
• B) $6000
• C) $10 000
• D) $4 000

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Definitions:

Price-taker Market

A market situation where individual sellers or buyers have no influence over the price of a product, accepting the prevailing market price as given.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as more units are produced.

Price Taker

An economic entity that does not have the market power to set the price of a good or service but must accept the market price as given.

Market Price

The present rate at which a service or asset is available for purchase or sale in a market.