You have an opportunity to invest in a new plant. The fixed costs are $100,000 per year. The marginal cost of production is $2 for a quantity up to 10,000 units per year. The marginal cost of production is $4 for quantity between 10,001 and 30,000 units per year (an additional 20,000 units per year) and $10 for production above 30,000 per year.
Answer the following questions. Show your work.
1) What is the break even quantity or quantities if the market is competitive and the market price is $8 per unit?
2) If the market is competitive and the market price is $8 per unit, what production range would the plant operate?
3) What is the break even quantity if the fixed cost per year was $310,000 per year, the market is competitive and the market price is $12 per unit?