The MBF plant costs a total of $ 45,000 ifit produces 500 products, and a total costof $ 100,000 if it produces 1,000 of thesame product. If each item sells for $ 100,it is desirable to calculate :a. Draw a diagram to determine thebreaking point for it.B. If we want to make a profit of $ 20,000by selling 2,500 products, what is thevariable cost?F Profit(P) = pQ - (F + vQ)%3DTR=pQTC=F+vQQ=F/(p-v)

Total Cost = 45,000 Quantity = 500 If produces 1000 units then TC = 100,000

The MBF plant costs a total of $ 45,000 if it produces 500 products, and a total cost of $ 100,000 if it produces 1,000 of the same product. If each item sells for $ 100, it is desirable to calculate : Draw a digaram to determine the

The MBF plant costs a total of $ 45,000 if it produces 500 products, and a total cost of $ 100,000 if it produces 1,000 of the same product. If each item sells for $ 100, it is desirable to calculate : Draw a digaram to determine the

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 7.5IP

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Question

The MBF plant costs a total of $ 45,000 if
it produces 500 products, and a total cost
of $ 100,000 if it produces 1,000 of the
same product. If each item sells for $ 100,
it is desirable to calculate :
a. Draw a diagram to determine the
breaking point for it.
B. If we want to make a profit of $ 20,000
by selling 2,500 products, what is the
variable cost?
F Profit(P) = pQ - (F + vQ)
%3D
TR=pQ
TC=F+vQ
Q=F/(p-v)

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