M&H LtdHas Sufficient Capacity to Fill an Order at a Special

question 26

Multiple Choice

M&H Ltd.has sufficient capacity to fill an order at a special price below its usual price.The special price exceeds its variable costs.What non-financial factors should also be considered in the decision?

• A)Is there the potential for additional sales to the customer in the future?
• B)How existing customers will respond if they find out about the special price.
• C)If there is the potential for additional sales to the customer in the future, can a higher price be charged?
• D)All of the above.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that sellers are willing to supply.

Upward Sloping

A term often used in economics to describe a curve or line that increases in height as it moves from left to right, indicative of a positive relationship between two variables.

Compact Disc

A physical medium for the storage and playback of digital audio and data, utilizing laser technology for reading and writing information.

Average Costs

Calculated by dividing the total cost of production by the quantity of output produced, indicating the cost per unit of output.