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It costs Fortune Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35.A foreign wholesaler offers to purchase 1,000 scales at $16 each.Fortune would incur special shipping costs of $2 per scale if the order were accepted.Fortune has sufficient unused capacity to produce the 1,000 scales.If the special order is accepted, what will be the effect on net income?
Total Product
The total output of goods or services produced by a firm or economy, typically measured over a specific period.
Profit-Maximizing
The process or strategy of adjusting production and pricing to achieve the highest possible profit based on costs and market demand.
Derived Demand
is the demand for a product or service that arises from the demand for another product or service, such as the demand for steel being driven by the demand for cars.
Capital Demand
The desire or need for capital goods, such as machinery and tools, that are used to produce other goods and services.
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