I. A producer can produce a product at a variable cost per unit of $9. The producer can sell the product for $14 each. If the fixed cost is $80,000
a. How many units must the producer sell to break-even?
b. What is revenue at 25,000 units? What is total cost at 25,000 units?
c. How many units must the producer sell in order to earn a profit of $50,000?
d. If the producer believes price can be raised without reducing the quantity you found in part c, what should the new price be to earn a profit of $75,000?
Expert Answer
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