Blinds N Such Is Considering a Merger with Window Supply

question 118

Multiple Choice

Blinds N Such is considering a merger with Window Supply Stores. Blinds' total operating costs of producing services are $750,000 for sales volume of $6 million. Window's total operating costs of producing services are $100,000 for a sales volume (JP) of $1 million. For a sales volume of $7 million, calculate the reduction in production costs the merged firms need to experience such that the total average cost (TAC) for the merged firms is equal to 12 percent.

• A) Decrease of $840,000
• B) Decrease of $10,000
• C) Decrease of $40,000
• D) Decrease of $90,000

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Definitions:

Prostitution

The practice of participating in sexual acts in exchange for money.

Actus Reus

Actus Reus refers to the physical act of committing a crime, as opposed to the mental intent to commit the act.

Mens Rea

A legal principle referring to the intent or knowledge of wrongdoing that constitutes part of a crime, as opposed to the action or conduct of the accused.

Criminal Liability

The legal responsibility for committing acts that are proscribed by criminal law and subject to punishment.