Zeilinger Products, Inc

question 51

Multiple Choice

Zeilinger Products, Inc., has a Screen Division that manufactures and sells a number of products, including a standard screen that could be used by another division in the company, the Home Security Division, in one of its products. Data concerning that screen appear below: The Home Security Division is currently purchasing 8,000 of these screens per year from an overseas supplier at a cost of $58 per screen.
What is the maximum price that the Home Security Division should be willing to pay for screens transferred from the Screen Division?

• A) $58 per unit
• B) $26 per unit
• C) $28 per unit
• D) $54 per unit

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Definitions:

Units

Units are standard measures or quantities used to specify or quantify the dimensions, amount, or capacity of something.

Price-Output Combination

The specific level of output and the price at which that output is sold in the market, relevant in contexts of market equilibrium and firm strategies.

Total Revenue

The total amount of money a firm receives by selling goods or services.

Elastic

refers to the responsiveness of demand or supply to changes in price or income.