Use the Table Below to Answer the Following Question(s) Use a Linear Optimization Model Based on the Data to Luthiers

question 16

Multiple Choice

Use the table below to answer the following question(s) .
Pickson Luthiers Corporation makes four models of electric guitars, ScarCT, Dela Mort, Warax, and Invazen. Each guitar must flow through five departments, assembly, painting, sound testing, inspection, and packaging. The table below shows the relevant data. Production rates are shown in units/hour. (ScarCT is assembled elsewhere) . Pickson wants to determine how many guitars to make to maximize monthly profit. $\begin{array}{|l|l|l|l|l|l|}\hline \begin{array}{l}\text { Pickson Luthiers } \\\text { Corporation }\end{array} & & & & & \\\hline & & & & & \\\hline \text { Data } & & & & & \\\hline \text { Guitar Model } & \begin{array}{l}\text { Selling } \\\text { price/Unit }\end{array} & \begin{array}{l}\text { Variable } \\\text { cost/Unit }\end{array} & \text { Min Sales } & \text { Max Sales } \\\hline \text { ScarCT } & 750.00 & 660.00 & 0 & 2500 \\\hline \text { Dela Mort } & 788.00 & 680.00 & 0 & 2000 \\\hline \text { Warax } & 800.00 & 700.00 & 100 & 1000 \\\hline \text { Invazen } & 850.00 & 800.00 & 80 & 500 \\ \hline & & & & \\\hline \begin{array}{l}\text { Production rates } \\\text { (units/hour) }\end{array} & \text { ScarCT } & \text { Dela Mort } & \text { Warax } & \text { Invazen } & \text { Hours } \\&&&&&\text { Available } \\\hline \text { Assembly } & - & 35 & 25 & 20 & 220 \\\hline \text { Painting } & 35 & 20 & 15 & 10 & 220 \\\hline \text { Sound Testing } & 20 & 10 & 20 & 18 & 220 \\\hline \text { Inspection } & 10 & 12 & 8 & 5 & 220 \\\hline \text { Packaging } & 9 & 10 & 5 & 8 & 220 \\\hline\end{array}$ Use a linear optimization model based on the data to answer the following question.
-According to the linear optimization model, what is the total number of ScarCTs produced?

• A) 2500
• B) 750
• C) 0
• D) 100

Analyze the impact of entering and exiting firms on industry profits and economic profits.

Calculate firm profits, losses, and the break-even point in a monopolistically competitive market.

Determine profit-maximizing output levels and prices for firms in monopolistic competition.

Evaluate the role of fixed and variable costs in decision-making for monopolistically competitive firms.

---

Definitions:

Fracking

A process of injecting liquid at high pressure into subterranean rocks, boreholes, etc., to force open existing fissures and extract oil or gas.

Natural Gas

A fossil fuel used primarily for heating, cooking, and electricity generation, consisting mainly of methane and other hydrocarbons.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to market stability.

Market Maker

A firm or individual who actively quotes both buy and sell prices for financial instruments, contributing to liquidity and efficiency in the markets.