Refer to the Following Figure

question 50

Multiple Choice

Refer to the following figure:

The graph shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MR_T, and marginal cost.
-What price should the firm charge in each market?

• A) P₁ = $20, P₂ = $32.50
• B) P₁ = $35, P₂ = $22.50
• C) P₁ = $20, P₂ = $20
• D) P₁ = $27.50, P₂ = $35
• E) Impossible to say because market demand is not given

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Definitions:

Work in Process Inventory

Goods that are in the production process but are not yet complete, representing a stage between raw materials and finished goods inventory.

Direct Materials

Ingredients essential to the production of a product, which can be directly linked to its manufacture and are integral to the completed item.

Time Tickets

Documents used to record the amount of time an employee spends on various tasks, which is useful for cost accounting purposes.

Materials Requisitions

Documents used to request and track the transfer of materials from inventory for production or other uses within a company.