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A firm has the capacity to produce 1,479,400 units of a product each year. At present, it is operating at 80 percent of capacity. The
A firm has the capacity to produce 1,479,400 units of a product each year. At present, it is operating at 80 percent of capacity. The firm's annual revenue is $1,224,930. Annual fixed costs are $314,506 and the variable costs are $.39 cents per unit. The following equations will be useful.
Profit = Revenue - Costs | ||
Revenue = Price each * quantity | ||
Costs = Fixed Cost + Variable Costs | ||
Variable Cost = Variable Cost per unit * number of units | ||
At the break even point, Profit = 0 |
What is the price for each unit?
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