Use the Following Information for Questions 14 and 15

question 5

Multiple Choice

Use the following information for Questions 14 and 15
QC Electronics produces small, hand-held calculators. The final product division of the company manufactures all parts of the calculator except the display unit, and then assembles, packages and distributes the product. The display units of the calculators are produced by a separate division of the firm called View Displays.
View Displays could sell the display units in the open market to a number of other manufacturers at a standard price of $.25. There is vigorous competition in the display unit industry and it is unlikely that any but the going price can be obtained.
Management has determined that the demand curve for quantity sold per month of the hand-held calculators is:
Q_c = 12,500 - 2000P_c, so that MR_c = 6.25 - .001Q_c)
while QC's marginal cost for hand-held calculators, excluding the cost of the display module is:
MC_c = .005Q_c
In addition, management has determined that the marginal cost for the display modules is:
MC_d = .0005Q_d
-The firm will maximize profit at what price?

• A) $5.25
• B) $5.75
• C) $6.25
• D) $6.75
• E) $7.75

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Definitions:

Hierarchy

A system of organization where entities are ranked one above the other based on status or authority.

Span of Control

The number of subordinates that a manager or leader can effectively oversee, control, or manage.

Centralization

The organizational structure where decision-making authority is concentrated at the top levels of management and little autonomy is given to lower levels.

Across Cultures Competency

The capacity to comprehend, converse with, and successfully engage with individuals from diverse cultural backgrounds.