Explain impact of changes in sales volume on both firms

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Reference no: EM1380658

Q. Draw two break-even graphs-one for a conservative firm using labour-intensive production also another for a capital-intensive firm. Assuming these companies compete within same industry also have identical sales; explain impact of changes in sales volume on both firms' profits.

Labour Capital
Intensive Intensive
Selling price $12.00 $12.00
Variable cost per unit $8.00 $5.00
Fixed costs $200,000 $300,000

Reference no: EM1380658

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