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Tasty Break', the sandwich business, has fixed costs of £1,000. The cost of producing a sandwich is £1 and the price charged for each sandwich is £2.
1. Give one example of a fixed cost for 'Tasty Break' and one variable cost.
2. What happens to the breakeven point if:
a) The price of a sandwich is reduced to £1.50
b) A cheaper bread supplier is found, reducing the production costs to 70p
c) Fixed costs increase to £1,100 per month?
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