Two Firms, C and D, Both Produce Coat Hangers

question 6

Multiple Choice

Two firms, C and D, both produce coat hangers.The price of coat hangers is $1.20 each.Firm C has total fixed costs of $750,000 and variable costs of 30' per coat hanger.Firm D has total fixed costs of $400,000 and variable costs of 50' per coat hanger.The corporate tax rate is 40%.If the economy is strong, each firm will sell 2,000,000 coat hangers.If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy is strong, the tax of firm C will be

• A)$420,000.
• B)$750,000.
• C)$510,000.
• D)$204,000.

Differentiate between primary and secondary stakeholders and their relevance to the firm.

Explore corporate governance, including its ethical concerns and the interaction model.

Understand the different functions and types of control within organizations.

Recognize the role of objectives in measuring actual performance.

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Definitions:

Product Differentiation

A marketing strategy that businesses use to distinguish their products from those of competitors by emphasizing unique features, quality, or design.

Purely Competitive

A market structure characterized by a large number of firms producing homogenous products and where no single firm has significant control over the market price.

Inelastic Demand

A situation where the demand for a good or service is not significantly changed by the changes in its price.

Maximize Profits

The objective of increasing a company's earnings to the highest possible level.