Potter Has Received a Special Order for 10,000 Units of Its

question 110

Multiple Choice

Potter has received a special order for 10,000 units of its product at a special price of $24.The product normally sells for $32 and has the following manufacturing costs: Potter is currently operating at full capacity and cannot fill the order without harming normal production and sales.If Potter accepts the order,what effect will the order have on the company's short-term profit?

• A)$64,000 decrease
• B)$64,000 increase
• C)$80,000 decrease
• D)$16,000 increase

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Definitions:

Long-Run Equilibrium

A state in which all aspects of the economy, including supply and demand, are in balance, and all economic agents have fully adjusted to any changes.

Decrease in Demand

refers to a situation where consumers' desire and ability to purchase a product or service diminishes, leading to a downward shift in the demand curve.

Short Run

A time period in economics during which at least one input (such as plant size) is fixed and cannot be changed.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing full adjustment to changes.