This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A firm's sunk costs are 100,000 and its marginal costs are 250 per unit. It produces 500,000 units ... (Read 100 times)

Zulu123

  • Hero Member
  • *****
  • Posts: 525
on: Jul 1, 2018
A firm's sunk costs are 100,000 and its marginal costs are 250 per unit. It produces 500,000 units and prices it at 400 per unit., How low can price go before the firm decides to shut down?
 a. 150
 b. 250
 c. 250.20
  d. 400

Question 2

Dremel Tools Dremel sells a high speed rotary tool appropriate for many workshop projects. They have developed hundreds of accessories and bits for their tools for many different applications. Why is the markup on the accessories higher than the markup on the rotary tools?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

owenfalvey

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jul 1, 2018
Answer to Question 1

b

Answer to Question 2

Dremel is engaging in a form of metering. Purchasers differ in their willingness to pay for the continued use of the system. Those who value it a lot will purchase many different accessories. Those who have lower willingness to pay are going only get the more basic bits. So, a higher margin for the accessories allows Dremel to extract more of the surplus from the high types without losing the low types.


Zulu123

  • Member
  • Posts: 525
Reply 2 on: Jul 1, 2018
:D TYSM

aruss1303

  • Member
  • Posts: 314
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

In the United States, an estimated 50 million unnecessary antibiotics are prescribed for viral respiratory infections.

Did you know?

After a vasectomy, it takes about 12 ejaculations to clear out sperm that were already beyond the blocked area.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

There used to be a metric calendar, as well as metric clocks. The metric calendar, or "French Republican Calendar" divided the year into 12 months, but each month was divided into three 10-day weeks. Each day had 10 decimal hours. Each hour had 100 decimal minutes. Due to lack of popularity, the metric clocks and calendars were ended in 1795, three years after they had been first marketed.

Faulty outlooping produces lambda phage containing bacterial DNA Faulty outlooping produces lambda phage containing bacterial DNA
Electron micrograph of pre-rRNA transcription units from the nucleolus of a frog Electron micrograph of pre-rRNA transcription units from the nucleolus of a frog
This unit is applying smoke to the fuel tank through an adapter and the leak was easily found to be ... This unit is applying smoke to the fuel tank through an adapter and the leak was easily found to be ...
Repeating Units of DNA and RNA Repeating Units of DNA and RNA
An educational institution has total direct labor and material costs of $1964 per student. Its ... An educational institution has total direct labor and material costs of $1964 per student. Its ...
One generation of random mating produces Hardy–Weinberg equilibrium One generation of random mating produces Hardy–Weinberg equilibrium
Video: Digestion Animation

For a complete list of videos, visit our video library