By how much must it cut its fixed cost

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a. A firm has fixed cost of $100,000. It charges a price of $25 per unit, has variable cost per unit of $15, and seeks to make $50,000 in profit. What output must the firm produce and sell to achieve this profit? 150,000/10 = 15,000 units output b. The firm in the above example wants to cut its fixed cost by enough to make $100,000 at the same quantity as found in your answer to part a. Its variable cost per unit and price remain the same as in part a. By how much must it cut its’ fixed cost?

Reference no: EM131010496

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