Calculate the break-even price for the toy truck


A toy manufacturer introduced a new toy truck that was a huge success in last year. The company invested $2.5 million for a plastic injection molding machine and $100,000 in plastic injection molds specifically for the toy. The cost of labor and the cost of materials essential to make each truck is about $3. This year, a competitor has developed a similar toy that has significantly reduced the demand for the toy truck. The original manufacturer is deciding whether they should continue production of the toy truck. Calculate the break-even price for the toy truck? Should you shut down if the estimated demand is 100,000 trucks?

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Macroeconomics: Calculate the break-even price for the toy truck
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