Final answer:
To earn a profit when the sales price drops to $80 per unit, the sales price should remain above the average variable cost.
Step-by-step explanation:
To determine the level of sales required to earn a profit when the sales price drops to $80 per unit, we need to compare the new price with the average variable cost. In the given information, we see that the farm makes losses at a price of $1.50 per pack because it is below the average variable cost. Therefore, we can assume that the average variable cost is higher than $1.50 per pack.
Since we don't have the exact average variable cost, we can't calculate the specific level of sales required to earn a profit. However, we know that as long as the sales price is above the average variable cost, the farm can cover its variable costs and have some revenue left over to pay fixed costs, resulting in a profit. So, if the sales price drops to $80 per unit but remains above the average variable cost, the farm will still be able to earn a profit.