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:

Net Creditor Nation

A country that has more investments abroad than other countries have within its borders, resulting in a positive balance of international investments.

Current Account

A component of a country's balance of payments that includes the trade balance, net primary income, and net secondary income.

European Nations

Countries located in Europe, characterized by diverse cultures, languages, and economies but often interconnected through political and economic unions.

Gold Standard

A currency regime where the national fiat currency's worth is directly pegged to gold.