Simon Inc. currently produces 110,000 units at a cost of $440,000. The cost is variable. Next year Simon Inc. expects to produce
1 answer:
Complete question:
Simon Inc. currently produces 110,000 units at a cost of $440,000. The cost is variable. Next year Simon Inc. expects to produce 115,000 units. Simon's relevant range for production is 100,000 to 120,000 units. If 115,000 units are produced next year, what is the expected variable cost?
A) $420,000
B) $430,000
C) $440,000
D) $460,000
Explanation:
Given ,
Simon Inc. currently produces 110,000 units at a cost of $440,000
Next year Simon Inc. expects to produce 115,000 units
Range for production is 100,000 to 120,000 units.
Now , we need to find out
If 115,000 units are produced next year, then the expected variable cost equation is ,
Variable cost per unit =
= $460,000
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Answer:
"$2,500" is the appropriate answer.
Explanation:
The question given seems to be incomplete. Below there is a attachment of full question is provided.
The given values are:
Plywood's price,
= $6 per sheet
Price falls,
= $4
Now,
At price $6, the consumer surplus will be:
=
=
= ($)
When price falls, the consumer surplus will be:
=
=
= ($)
Hence,
The increase in consumer surplus will be:
=
= ($)
