A small firm builds television antennas. The investment in plan and equipment is $200,000. The variable cost per television ante

Question

2 years ago

11

nna is $500. The price of the television antenna is $1000. How many television antennas would be needed for the firm to break even

1 answer:

sergeinik [125] · Answer 1 · 2022-07-10T14:57:11+03:00

Answer:

Break-even quantity is 400 units.

Explanation:

Below is the calculation for the number of television antennas:

At break-even, the firm's total revenue is equal to the total cost.

Cost of investment (fixed cost) = $200000

Variable cost = $500

Pirce of television antenna = $1000

At break-even, TR = TC

(P x Q) = (TFC + TVC)

1000Q = 200000 + 500Q

10000Q-500Q = 200000

500Q = 200000

Q = 200000 / 500

Q = 400 units

Thus break-even quantity is 400 units.