Question 2 (Provide step by step response)

Bags Fixed Cost Variable Cost Total Cost

0 $1,700 $ - $1,700

100 $1,700 $500 $2,200

200 $1,700 $1,200 $2,900

300 $1,700 $2,700 $4,400

400 $1,700 $5,200 $6,900

500 $1,700 $9,000 $10,700

600 $1,700 $15,000 $16,700

700 $1,700 $23,800 $25,500

800 $1,700 $36,800 $38,500

900 $1,700 $55,800 $57,500

1,000 $1,700 $83,000 $84,700

Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order?At what quantity of bags will profits be maximized?

Please select any/all viable approaches below:

A. Using Qb = F/(MR - AVC) where Qb is the break even quantity, the event would break even at 283 bags.

B. Using the profit-maximizing rule, MR MC, the quantity of bags that will maximize profits is 200 bags.

C. Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags.

D. The break even quantity cannot be determined in this case.