Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
|
Bags/Participants |
Fixed Cost |
Variable Cost |
Total Cost |
|
0 |
$1,700 |
$ - |
$1,700 |
|
100 |
$1,700 |
$500 |
$2,200 |
|
200 |
$1,700 |
$1,200 |
$2,900 |
|
300 |
$1,700 |
$2,700 |
$4,400 |
|
400 |
$1,700 |
$5,200 |
$6,900 |
|
500 |
$1,700 |
$9,000 |
$10,700 |
|
600 |
$1,700 |
$15,000 |
$16,700 |
|
700 |
$1,700 |
$23,800 |
$25,500 |
|
800 |
$1,700 |
$36,800 |
$38,500 |
|
900 |
$1,700 |
$55,800 |
$57,500 |
|
1,000 |
$1,700 |
$83,000 |
$84,700 |
Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized?
| A |
Use the profit maximizing rule, MR ≥ MC, buy 300 bags. |
|
| B |
Use the profit maximizing rule, MR ≥ MC, buy 200 bags. |
|
| C |
Use Qb = F/(MR- |
|
| D |
Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200. |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
