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Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
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Solve all subpoint  I give thumb up ?

 

1. A firm's monthly fixed costs are $15000. The firm makes a single product, for which the unit variable
cost is $8.5. The product sells at a price $11.5. Plant capacity is 7500 units per month.
I. Find the breakeven output level.
II. What happens if variable cost increases by $1.5 and selling price decreases by $1?
III. What happens if variable cost and selling price both increase by 10.5%?
IV. What percentage of plant capacity is used at breakeven level in all cases?
Transcribed Image Text:1. A firm's monthly fixed costs are $15000. The firm makes a single product, for which the unit variable cost is $8.5. The product sells at a price $11.5. Plant capacity is 7500 units per month. I. Find the breakeven output level. II. What happens if variable cost increases by $1.5 and selling price decreases by $1? III. What happens if variable cost and selling price both increase by 10.5%? IV. What percentage of plant capacity is used at breakeven level in all cases?
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