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1. ABC’ company’s cost function for the next four months is C= 500,000 + 5q.

Required:
a) The break-even volume of sales if the selling price is Birr 6 per unit.
b) What would be the company’s cost if it decided to shut down operations for the next four months?

1 answer

(a) 6q = 500,000 + 5q
(b) set q=0
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