A company can manufacture 2,000 handbags for $200,000. If it were to manufacture 5,000 units of the same handbag, it will cost $350,000. The selling price per handbag is $260. Assume a linear relationship exists between the number of units produced and cost.

A.     Find the marginal cost and the fixed cost.

B.   Find the cost, revenue and profit equations.

C.    Find the break-even point.

Answer rating: 100% (QA)

A Marginal cost is the change in total cost resulting from producing one additional unit In this case we can calculate the marginal cost by finding th... View the full answer