Calico Joe Fabrics Sells a Single Product What Price Should Calico Joe Fabrics Charge to Maximize Profits

question 10

Multiple Choice

Calico Joe Fabrics sells a single product.The company estimates total fixed costs at $360,000 with demand, price, and total variable costs as follows: $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Units } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Unit } \\\text { Price }\end{array} & \begin{array} { c } \text { Total Variable } \\\text { Costs }\end{array} \\\hline 73,000 & \$ 31 & \$ 1,606,000 \\83,000 & 30 & 1,826,000 \\93,000 & 29 & 2,046,000 \\103,000 & 28 & 2,266,000 \\113,000 & 27 & 2,486,000\\\hline\end{array}$$ What price should Calico Joe Fabrics charge to maximize profits?

• A)$31
• B)$30
• C)$29
• D)$28
• E)$27

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Definitions:

Barrier-To-Entry Effect

Factors that prevent or hinder new competitors from easily entering an industry or area of business.

Preference Consistency Effect

A phenomenon where individuals show a tendency to remain consistent with their previously stated preferences and choices over time.

Social Threat

Social threat refers to the perceived or real risk of harm to one's social status, acceptance within a group, or personal relationships.

Physical Threat

Any potential cause of physical harm or damage to an individual's bodily integrity, security, or health.