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# Tetrangle Manufacturing has fixed costs of \$2,160 per day. What is the break even level of daily output for the firm?

Tetrangle Manufacturing has fixed costs of \$2,160 per day. The firm manufactures bicycle component upgrade kits. The kits have a short-run average variable cost of \$48 and are sold for \$66 each.

(i) What is the break even level of daily output for the firm?
(ii) What is the degree of operating leverage when daily output is Q = 170?

2. The market supply and demand functions for a product traded on a perfectly competitive market are given below:

QD = 25 - P
QS = -5 + 4P

Calculate the equilibrium price and quantity.

#### Solution Preview

1. Tetrangle Manufacturing has fixed costs of \$2,160 per day. The firm manufactures bicycle component upgrade kits. The kits have a short-run average variable cost of \$48 and are sold for \$66 each.
(i) What is the breakeven level of daily output for the firm?
breakeven level is the point at which sales equal costs. The point is located by breakeven analysis, which ...

#### Solution Summary

Step by step computations done for you.

\$2.19