The medium-run equilibrium is characterized by four conditions: Output is equal to potential output Y = Yn. The unemployment rat
e is equal to the natural rate u = un. The real policy interest rate is equal to the natural rate of interest rn where aggregate demand equals Yn. The expected rate of inflation pe is equal to the actual rate of inflation p. a. If the level of expected inflation is formed so pe equals p1-12, characterize the behavior of inflation in a mediumrun equilibrium. b. If the level of expected inflation is pQ , what is the level of actual inflation in the medium-run equilibrium? c. Write the IS relation as Y = C1Y - T2 + I1Y, r + x2 + G. Suppose rn is 2%. If x increases from 3 to 5%, how must the
1 answer:
You might be interested in
Answer:
The sales price per unit will be $6.75.
Explanation:
The break even point is where the total revenue is total cost such that profit equals zero.
The break even level of output is 5,000 units.
The fixed costs is $30,000.
The variable cost per unit is $.75.
The total variable cost is
=
= $3750
The total cost will be
= $30,000 + $3,750
= $33,750
Which is also equal to total revenue
Now,
Total revenue =
$33,750 =
Price =
Price = $6.75