Single: Face a Cost Function

Suppose you face a cost function where the fixed costs are $50 and the average variable costs are $6.

What is the break even point when the product sells for $ 8 per unit?

Set up an equation so that the average cost per unit is equal to the average revenue per unit.
The average fixed cost is, Fixed/quantity, and the average variable cost is given. The price is equal to the average revenue.

That gives us:


The break even quantity is 25 units.

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