Marley Corporation Makes Three Products (X, Y, & Z) with the Following

question 78

Multiple Choice

Marley Corporation makes three products (X, Y, & Z) with the following characteristics: The company has a capacity of 2,000 machine hours, but there is virtually unlimited demand for each product. In order to maximize total contribution margin, how many units of each product should the company produce?

• A) 2,000 units of X, 500 units of Y, and 200 units of Z
• B) 0 units of X, 0 units of Y, and 200 units of Z
• C) 0 units of X, 500 units of Y, and 0 units of Z
• D) 1,000 units of X, 0 units of Y, and 0 units of Z

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Definitions:

Monopoly

A market condition where a single firm has exclusive control over a product or service, allowing it to limit competition and set prices.

Total Cost

The sum of all costs incurred by a firm in the production of goods or services, including fixed and variable costs.

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Monopoly Model

An economic situation characterized by a single seller who has exclusive control over a product or service, leading to limited competition.