The National Division of Roboto Company is buying 10,000 widgets from an outside supplier at $30 per unit. Roboto's Overseas Div
ision, which is producing and selling at full capacity (12,000 units), has the following sales and cost structure:
Sales price per unit $45.00
Variable cost per unit 22.50
Fixed cost (at capacity) per unit 15.00
If the Overseas Division meets the outside supplier's price and sells the 10,000 widgets to National, the effect on overall company profits will be:
A. $75,000 higher
B. $225.000 lower
C. $300,000 higher
D. $150,000 lower
Sales price per unit $45.00
Variable cost per unit 22.50
Fixed cost (at capacity) per unit 15.00
If the Overseas Division meets the outside supplier's price and sells the 10,000 widgets to National, the effect on overall company profits will be:
A. $75,000 higher
B. $225.000 lower
C. $300,000 higher
D. $150,000 lower
1 answer:
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Answer:
e.people will not change the quantity of the good when the price of the good is changed.
Explanation:
When the demand curve for a good is vertical, it indicates that the demand for the good is perfectly inelastic ; a change in price has no effect on the quantity demanded.
Goods with perfect inelasticity usually have no or little close subsituites.
I hope my answer helps you
