A Poultry Farmer Is Debating Whether to Acquire Rhode Island

question 46

Multiple Choice

A poultry farmer is debating whether to acquire Rhode Island Reds or Buff Orpingtons to lay the eggs he wants to sell. The fixed costs for the Buffs would be $7,500 and the variable costs per egg would be a dime per egg. The Reds would have a fixed cost of $6,000 and a variable cost of fifteen cents. At what level of egg production would the poultry farmer be indifferent between Rhode Island Reds and Buff Orpingtons?

• A) 20,000 eggs
• B) 30,000 eggs
• C) 50,000 eggs
• D) 60,000 eggs

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Definitions:

Lower Prices

Reduced costs of goods or services offered to consumers, often used as a strategy to increase demand or market share.

Market Share

The portion of a market controlled by a particular company, expressed as a percentage of total sales in the industry.

New Customers

Individuals or entities that have recently started purchasing goods or services from a business.

Business Plan

A document that outlines a company's future objectives and strategies for achieving them, often crucial for securing financing.