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damaskus [11]
2 years ago
12

Company A produces and sells 10,000 units of its product for $10 per unit. Variable costs are $4 per unit and fixed costs total

$30,000. A move to a larger facility would increase rent expense by $8,000, and allow the company to meet its demand for an additional 1,000 units. If the move is made, profits will:
Business
1 answer:
Anastaziya [24]2 years ago
6 0

Answer:

Effect on income= $2,000 decrease

Explanation:

Giving the following information:

Selling price= $10 per unit.

Variable costs are $4 per unit

A move to a larger facility would increase rent expense by $8,000, and allow the company to meet its demand for an additional 1,000 units.

We need to calculate the effect in the income of moving to a larger facility.

Effect on income= total contribution margin increase - increase in fixed costs

Effect on income= 1,000*(10 - 4) - 8,000

Effect on income= $2,000 decrease

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Rent controls are a typical example of a price ceiling.
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Answer:

B. reductions in apartment quality

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kobusy [5.1K]

Answer:

1. Faces a downward-sloping demand curve  

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