If Fixed Costs Are $500,000 and the Unit Contribution Margin

question 212

Multiple Choice

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

• A) 25,000
• B) 29,000
• C) 4,000
• D) 21,000

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Definitions:

Monopolistically Competitive

Describes a market structure where many firms sell products that are similar but not identical, allowing for differentiation and some degree of market power.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, leading to some degree of market power and differentiation.

Profit Maximization

The process or strategy employed by businesses aiming to achieve the highest possible profit, where marginal costs equal marginal revenues.