In 2011, Angel's Bath and Body Shop Had Variable Costs

question 9

Multiple Choice

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. Angel's 2011 break-even sales volume was

• A) $36,000.
• B) $37,500.
• C) $49,500.
• D) $54,000.

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity of output produced, representing the per unit cost of production.

Price-taker Market

is a market condition where individual sellers or buyers have no control over the price of a product, typically due to the product being homogeneous and market participants being numerous.

Market Demand Curve

A graphical representation that illustrates the total quantity of a particular good or service that consumers in a market are willing to buy at various prices.

Minimum Average Total Cost

The lowest point on the average total cost curve, representing the most efficient scale of production for minimizing costs per unit.