When Frank produces 200 hot dogs, his fixed cost is $200, and his variable cost is $500. If he gets a price of $7 per hot dog when he sells them at a ball game, which of the following is true?

Question

Quizplus · Accepted Answer

Frank's total cost is the sum of his fixed and variable costs, which is $200 (fixed) + $500 (variable) = $700. Selling 200 hot dogs at $7 each gives him a revenue of 200 * $7 = $1400. Since his revenue ($1400) is greater than his total cost ($700), he is making a profit.

When Frank Produces 200 Hot Dogs, His Fixed Cost Is