Asked by Joshua Waterman on Jul 02, 2024
Verified
If the price is $20 per unit,what is the break even amount of units for technology A?
A) 50
B) 60
C) 70
D) None-They would have to shut down
Break Even
The point at which total costs and total revenues are equal, resulting in no profit or loss for a business.
Fixed Costs
Expenses that remain constant regardless of the amount of goods produced or sold, including items like lease payments, wages, and insurance costs.
- Clarify and figure out the break-even point in units and discuss its consequences on business strategy formulation.
- Analyze the aspects that guide the choice between alternative technologies or business strategies by evaluating their costs.
Verified Answer
FR
Faruq Raheen El Bey Neffer4 days ago
Final Answer :
D
Explanation :
At a price of $20 per unit, the firm cannot cover the marginal cost of $50 for Technology A, meaning it would operate at a loss for each unit produced. Therefore, it cannot break even and would have to shut down.
Learning Objectives
- Clarify and figure out the break-even point in units and discuss its consequences on business strategy formulation.
- Analyze the aspects that guide the choice between alternative technologies or business strategies by evaluating their costs.