Answer:
1. What was the product's operating income(loss) last year = $90,000 loss
2. What is the product's Break even point in unit sales and dollars
• Break even sales in units 18,000
• Break even i n sale dollars $1,260,000
3. Maximum annual profit given an increment of 5,000 units and reduction of sales price per unit by $2.
• Net profit of $20,000
4. What would be the break even point in unit sales and dollars using the selling price that you determined in requirement 3.
• Break even sales units 19,285.7
• Break even in sales dollars $1,311,427.6
Explanation:
Please see attached detailed solution to the above questions and answers.
Answer:
Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that P = ATC, P>ATC, MR =MC, or MR>MC at the optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is the efficient scale. True False
This indicates that there is a markup on marginal cost in the market for shirts. True False
Explanation:
In the long run, monopolistically-competitive entities produce at a level where marginal cost and marginal revenue are equal. This makes it impossible for individual companies to sell their products at prices above the average cost. This situation means that monopolistically-competitive companies will always earn zero economic profit in the long run.
Answer:
Step wise detailed solution is given in the attached diagram
Answer:
$18200
Explanation:
Sunk cost is cost that has already been incurred and cannot be recovered. It should not be considered when making future decisions.
The computers costs $18200. This amount has already been incurred and it cannot be recovered.
