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a) You want to start a firm whose output you believe you can sell for $25 per unit. The operation will require fixed costs of

a) You want to start a firm whose output you believe you can sell for $25 per unit. The operation will require fixed costs of $130,000, and the variable costs are expected to be $16 a unit. What will be the break-even level of output?

b) If fixed costs reduce to $100,000 and the variable costs reduced to $15, what is the new break-even level of output?

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