How can break-even analysis be used to project the level of operation needed to achieve a targeted profit level?

What will be an ideal response?

The targeted level of profit can be factored into the break-even equation as a fixed cost, and then determine the level of output and sales at which the operating costs plus fixed costs plus desired profit would just equal sales revenue: Q = (TFC + Desired Profit)/(P - AVC), where Q = output, TFC = total fixed cost, P = sales price, and AVC = average variable cost.

Economics

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The figure above shows the competitive market for slices of key lime pie. If the production is 40 slices per day, someone is willing to buy another slice of pie for

A) more than it costs to produce the slice. B) less than it costs to produce the slice. C) an amount equal to the cost of producing the slice. D) an amount equal to the cost of producing all 40 slices. E) an amount that is not comparable to the cost of producing the slice.

Economics

Short-run macroeconomic equilibrium occurs when

A) structural and frictional unemployment equal zero. B) the equilibrium lies on the long-run aggregate supply curve. C) aggregate demand and short-run aggregate supply intersect. D) A and B

Economics