Break-even level of output
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1. The price of a product is $1 a unit. A firm can produce this good with variable costs of $0.50 per unit and total fixed costs of $100. Determine the break even level of output.
2. Given the following information, answer the following questions.
TR = $3
TC = $1,500 + $2Q
a. What is the break-even level of output?
b. If the firm sells 1,300 units, what are its earnings or losses?
c. If sales rise to 2,000 units, what are the firm's earnings or losses?
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Solution Summary
The solution explains the calculation of breakeven units and the earnings of a firm given the level of units sold
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1. The price of a product is $1 a unit. A firm can produce this good with variable costs of $0.50 per unit and total fixed costs of $100. Determine the break?even level of output.
The breakeven level of output is when the total costs are equal to the total revenues. The costs are variable and fixed costs. The selling ...
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