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Economics

Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its fixed costs---over a considerable range of volume----are $350,000 per month, and the variable costs are $0.50 per dollar of sales.

a. What is the annual breakeven point volume(D')?

b. What would be the effect on D' of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%?

c. What would be the effect on D' if the fixed costs were decreased by 10% and the variable cost per unit were increased by the same percentage.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M953477

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