The Firm's Fixed Costs Are $60 000, Variable Cost Per

question 30

Multiple Choice

The firm's fixed costs are $60 000, variable cost per unit is $15 and selling price per unit is $20. The break-even point in units is

• A) 1715.
• B) 3000.
• C) 4000.
• D) 12 000.

---

Definitions:

Vertical Relationships

The interactions between firms at different stages of the production process, such as suppliers and retailers.

Price Discriminate

Price discrimination is the practice of selling the same product or service at different prices to different customers, often based on willingness to pay, without a corresponding cost difference.

Complementary Demand

Refers to products or services for which the demand increases or decreases together because they are used together, like smartphones and data plans.

Double Markup

A pricing strategy where a product is marked up twice before it reaches the final consumer: first by the wholesaler then by the retailer, leading to a higher final price.