Question
Suppose a firm faces the following price: $70, has total fixed costs of $14606 and average...
Suppose a firm faces the following price: $70,
has total fixed costs of $14606
and average variable costs of $52.
Assume all of these are constant.
What is the break even quantity for this firm?
Suppose the firm has a capacity constraint of 313.
What is the profit (positive or negative) of the
firm if it produced at capacity?
If the firm has a negative profit be sure to put the negative sign
in your answer.
For the following questions assume the firm is producing at
capacity
and the only change is the variable being asked
about.
What price would the firm have to charge for it to breakeven?
What is the maximum amount Total Fixed Costs can be for the firm to
breakeven?
What would the Average Variable Costs have to be for the firm to
breakeven?
Homework Answers
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