Answers

2015-01-09T18:42:05+05:30
To break-even production total unit to be produced = 4000
Total Fixed cost= Rs 40000
Fixed cost per unit= 40000/4000= Rs 10
Variable cost is Rs 20.
Hence price of product for first 4000 unit is 10+20=Rs 30
For subsequent production cost of product = variable cost
Hence profit is 30-20= Rs10
To make Rs 20000 profit 20000/10= 2000 product additionally have to be made.
Firm's output should be 2000+4000=6000 units
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