Homework Answers
(1)
Profit ($) = [Q x (P - AVC)] - TFC
= [80,000 x (60 - 30)] - 2,100,000
= (80,000 x 30) - 2,100,000
= 2,400,000 - 2,100,000
= 300,000
(2)
Break-even volume = TFC / (P - AVC)
= 2,100,000 / (60 - 30)
= 2,100,000 / 30
= 70,000 units
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