The Publisher of an Online Economics Primer Course Is Trying

question 9

Multiple Choice

The publisher of an online Economics Primer course is trying to sell the primer to a group of MBA students and a group of EMBA students in the US.The maximum willingness to pay for the primer in each group of students as well as the number of students in each group is given in the table.Assume the marginal cost is $50. $$\begin{array} { | l | l | l | } \hline & \text { Willinemess to pay } & \text { Number af students } \\\hline \text { EMEA } & \$ 300 & 1,000 \\\hline \text { MEA } & \$ 100 & 2,000 \\\hline\end{array}$$ What is (are) the publisher's profit maximizing price(s) ?

• A)Charge $300 to EMBA and $100 to MBA
• B)Charge either $300 or $100 (the publisher is indifferent)
• C)Charge a uniform price of $300
• D)Charge a uniform price of $100

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Definitions:

Variable Manufacturing Overhead

Expenses that vary with production volume, such as utilities and materials.

Job Cost

The total expense calculated for a specific job or project, including materials, labor, and overhead.

Unit Product Cost

The total cost to produce one unit of product, including labor, materials, and overhead.

Predetermined Overhead Rate

A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.