Chulo Ibsen Makes and Sells Hand-Forged Wrought Iron Fire Screens

question 110

Multiple Choice

Chulo Ibsen makes and sells hand-forged wrought iron fire screens for $125 each.He has determined that his fixed costs are $8,000,and his variable costs per firescreen are $45.What is his break-even point in dollars?

• A) $22,550
• B) $12,500
• C) $10,000
• D) $8,000
• E) $5,875

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Definitions:

Complementary Goods

are products or services that are used together, where the use or consumption of one increases the demand for the other.

Close-Substitute

A good or service that can easily replace another in satisfying consumer needs, with very little change in consumption patterns.

Consumer Preferences

The tastes, preferences, and priorities that individuals have regarding the consumption of goods and services.

Close-Substitute

A product or service that can easily replace another in the consumption preferences of consumers due to its similarity.