There is a sudden and very severe drought and the cost of water skyrockets from $1.00 to $20.00 a gallon. If Ruth's uses 1000 gallons to water the current month's output of 5500 plants, what is their new breakeven quantity of output?

Question

Quizplus · Accepted Answer

Given the drastic increase in water cost without any mention of a corresponding increase in the selling price of the plants or a decrease in other costs, Ruth's would likely find it economically unfeasible to continue operations under these conditions, leading to a shutdown.

There Is a Sudden and Very Severe Drought and the Cost