Harp Widgets Determined Each Deluxe Widget It Produces Has a Unit

question 35

Multiple Choice

Harp Widgets determined each deluxe widget it produces has a unit variable cost of $15.00, with total fixed costs of $600,000 for the period.Harp expects to sell 60,000 deluxe widgets and has applied a markup percentage of 35%.What contribution margin will Harp earn from the sale of each deluxe widget?

• A)$33.75
• B)$8.75
• C)$18.75
• D)$25.75

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Definitions:

Monopolistic Competitor

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Short Run

A period in economics during which at least one factor of production is fixed in quantity; the opposite of the long run, where all factors of production are variable.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing firms to adjust all inputs.

Product Differentiation

The strategy of distinguishing a product or service from others in the market to make it more attractive to a specific target market.