Medical Equipment Inc. is a Canadian company that produces and sells medical masks that are
used in hospitals. The company has a total of $3,000,000 as yearly fixed costs. The below
table shows the company's costs, revenues, and profits at different levels of production.
Output
(masks per
year)
Fixed
Costs
Total
Variable
Costs
Total Costs
Total
Revenue
Profit (or
Loss)
0
$3,000,000
0
$3,000,000
0
-$3,000,000
1,000,000 $3,000,000 $2,000,000
$5,000,000
$3,000,000 -$2,000,000
2,000,000 $3,000,000 $4,000,000 $7,000,000
$6,000,000 -$1,000,000
3,000,000 $3,000,000 $6,000,000 $9,000,000 $9,000,000
0
4,000,000 $3,000,000 $8,000,000 $11,000,000 $12,000,000 $1,000,000
5,000,000 $3,000,000 $10,000,000 $13,000,000 $15,000,000 $2,000,000
6,000,000 $3,000,000 $12,000,000 $15,000,000 $18,000,000 $3,000,000