Question

Jordan Company makes a product that sells for $33 per unit. The company pays $23 per unit for the variable costs of the product and incurs annual fixed costs of $96,000. Jordan expects to sell 21,000 units of product. Required Determine Jordan's margin of safety expressed as a percentage. (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45))

Answer 1

The question asks for the calculation of key economic figures for a company in a perfectly competitive market to determine the profit maximizing quantity, a fundamental concept in microeconomics.

Step-by-step explanation:

The question involves a company that is operating in a perfectly competitive market and discusses how to determine the profit maximizing quantity. It requires the calculation of total revenue, marginal revenue, total cost, and marginal cost. After calculating these values for each output level, we need to identify the point where marginal cost equals marginal revenue, which is where profit maximization occurs. This concept is foundational in microeconomic theory, particularly in the study of firm behavior in competitive markets.