The increasing factor of the break-even quantity.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Since most consumers spend very little on salt, a small increase in the price of salt will:A. reduce quantity demanded by a large amountB. not reduce quantity demanded by very muchC. not change quantity demandedD. increase quantity demanded by a small amount 2.Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent= $100000/year, inventory= $250000/ year, energy=$50000/year, and labor (one clerk) = $10000/year. In addition, Fred’s current income as a computer programmer is $40000 per year. Assuming Fred would earn $ 460000 in revenues, he could expect to earn:A. an accounting profit of $10000 per yearB. an accounting profit of $ 60000 per yearC. an economic profit of $ 10000 per yearD. an economic profit of $50000 per year 3.Suppose a firm employs only capital and labour (K and L) and its production function is Q = 2KL. If the quantities of labour and capital are fixed at K =10 and L = 25, then:A. total output cannot exceed 125B.…

Price ($) 1000 500 300 0 300 500 Supply Demand What is the total cost of producing 300 iPads? 1000 Quantity

When there are economies of scope between products, selling off an unprofitable subsidiary could lead to Select one: a. a major reduction in costs. b. only a minor reduction in costs. C. only a minor reduction in sales. d. a major reduction in sales.

Answer 2

Question

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Answer 6

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.

Answer 7

Chapter 5, Problem 1MC

To determine

The increasing factor of the break-even quantity.

Answer 8

Expert Solution & Answer

Explanation of Solution

Option (c)

The break-even point refers to a point in the level of operations at which a company experiences that its revenue generated is equal to its cost incurred. The break-even point can be calculated using the following formula:

Break-even point=Fixed costPice−Marginal cost (1)

As per Equation (1), a decrease in the price level will decrease the denominator and thereby increase the break-even quantity. Therefore, a fall in the price level will increase the break-even quantity and thus, option (c) is correct.