If a Firm Has Fixed Costs of $30,000, a Variable

question 79

Multiple Choice

If a firm has fixed costs of $30,000, a variable cost per unit of $.75, and a break-even point of 5,000 units, the sales price per unit is ________.

• A) $2.50
• B) $6.75
• C) $4.00
• D) $4.50

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Definitions:

Potential Arbitrage

An opportunity to buy an asset at a low price in one market and sell it at a higher price in another, profiting from the difference.

Generalized Fisher Effect

The theory suggests that the real interest rate is independent of monetary measures, relating nominal interest rates in one country to expected inflation rates.

Triangle Arbitrage

A method of profiting from the inconsistency in exchange rates between three currencies in the foreign exchange market by converting them sequentially.

Canadian Dollar

The official currency of Canada, often represented by the symbol CAD or $CA, and used throughout the Canadian economy.