C-Drive Components Has Collected the Following Production Data for the Past

question 41

Multiple Choice

C-Drive Components has collected the following production data for the past four months: $$\begin{array} { c r } \text { Units produced } & \text { Total cost } \\\hline 7,000 & \$ 16,500 \\10,000 & 22,500 \\8,500 & 17,750 \\9,000 & 21,000\end{array}$$ If the high-low method is used, what is the monthly total cost equation?

• A) Total cost = $2,500 + ($2.00 × units produced)
• B) Total cost = $3,750 + ($2.75 × units produced)
• C) Total cost = $1,500 + ($2.00 × units produced)
• D) Total cost = $500 + ($2.25 × units produced)

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Definitions:

Herfindahl Index

A tool for measuring business sizes within their respective sectors, providing insight into the competitive landscape.

Four-firm Concentration Ratio

A measure that represents the market share of the four largest firms in an industry, used to assess the degree of competition and concentration in the market.

Mutual Interdependence

A situation in which entities rely on each other to a significant extent, particularly relevant in markets with a few dominant firms.

Antitrust Laws

Legislation enacted to prevent anti-competitive practices, monopolies, and to promote fair competition for the benefit of consumers.