Final answer:
To determine the quantity of units Lamar must produce and sell in order to break even, we need to analyze the total revenue and total cost of production.
Step-by-step explanation:
To determine the quantity of units Lamar must produce and sell in order to break even, we need to analyze the total revenue and total cost of production. Total revenue represents the amount of money received from selling a certain quantity of units, while total cost represents the expenses incurred in producing those units.
If Lamar's total revenue is equal to his total cost, then he has reached the break-even point. In other words, he has neither made a profit nor incurred a loss. Lamar needs to calculate his average cost per unit and divide his fixed costs by the difference between the selling price and the average cost per unit to find the breakeven quantity.