If the first copy cost of a music video is $223,000 and the marginal cost is $0, then how many copies should the firm sell in order to break even if the price was $10 each?

Question:

If the first copy cost of a music video is $223,000 and the marginal cost is $0, then how many copies should the firm sell in order to break even if the price was $10 each?

A) 2,230

B) 223,000

C) Zero

D) 22,300

The correct answer is B.

Explanation:

Step 1 - Relationship between Marginal Cost and Break Even Price (BEP)

This is given as:

BEP =    

Step Two

First compute the denominator

= 1-(0/10)

= 1-0

= 1

Step 3

Therefore BEP = 223,000/1

=  $223,000

Cheers!

answer; no individual buyer or seller has any significant impact on the market price;