Question :
Multiple choice
32.Which one of the following does economic theory suggest?
A.Set : 1302806
Multiple choice
32.Which one of the following does economic theory suggest?
A.Set a price that allows profit maximization
B.Set a price that allows the minimum number of units to be sold at the highest unit price
C.Set a price that will maximize revenues
D.Set a price that will maximize market share
33.Which of the following factors is considered in a product pricing decision made using cost-plus pricing?
A.Price customers are willing to pay
B.Selling and administrative costs
C.Competitors’ actions
D.Fixed cost per unit
34.What occurs to the quantity demanded as the price decreases?
A.It will increase.
B.It will decrease.
C.It will remain constant.
D.It will increase and then decrease.
35.Which of the following stays constant when the price per unit changes?
A.Demand
B.Contribution margin per unit
C.Total fixed costs
D.Profit
36.Which of the following statements about price, demand, and profit is generally true?
A.As price increases, demand decreases.
B.As demand increases, profit decreases.
C.As price increases, demand increases.
D.As price decreases, demand decreases.
37.Rosetone Retail sells one product with a variable cost of $3.50 per unit. The demand at different prices to be charged is shown below:
Units Demanded Unit Price
10,000 $9
15,000 $8
20,000 $7
25,000 $6
If fixed costs are $42,000, what price should Rosetone charge in order to maximize profits?
A.$9
B.$8
C.$7
D.$6
38.Which of the following statements about prices and profit is true?
A.Higher prices always lead to lower profits because fewer units will be sold.
B.Higher prices always lead to lower demand and higher profits.
C.Higher prices combine with lower demand to change the level of profits.
D.Higher prices will be offset by lower demand so profits will stay constant.
39.What should be maximized when setting the price for a product?
A.Total revenue
B.Contribution margin per unit
C.Net income
D.The number of units of product sold
40.Winslow Carpet produces and sells berber carpet by the yard with a variable cost of $16 per yard. Total fixed costs are $280,000. The following chart represents the estimated demand at various price levels.
Yards Demanded Unit Price
57,000 $25
67,500 $24
72,500 $23
86,000 $21
Which price will generate the largest profit for Winslow Carpets?
A.$25
B.$24
C.$23
D.$21
41.Wilkes Manufacturing sells one product with a variable unit cost of $18. The company knows that the price charged will affect demand. Fixed costs are $275,000. If sales exceed 50,000 units, the company will need to lease additional manufacturing space and equipment at an additional cost of $100,000 per year. The following chart represents the estimated demand at various price levels:
Units Demanded Unit Price
25,000 $30
50,000 $28
75,000 $25
100,000 $23
Based on this information which of the following statements is true?
A.Selling the units at $23 will generate the largest profit.
B.Selling the units at either $23 or $28 will generate a profit of $225,000.
C.Selling the units at either $25 or $28 will generate a profit of $225,000.
D.Selling the units at $28 will generate the largest profit.
