-Refer to the Above Table

question 21

Multiple Choice

-Refer to the above table. Suppose the demand for smartphones rises because more people use the Internet with a smartphone. The new equilibrium price will be

• A)$200.
• B)$275.
• C)more than $275.
• D)impossible to be determined given the information.

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Definitions:

Selling Price

The amount of money for which a product or service is sold to the customer, including all applicable costs and markup.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs.

Break-Even Point

The financial point at which total costs and total revenue are equal, resulting in no net loss or gain.

Safety Margin

The amount by which a product's selling price exceeds its production cost, providing a buffer for profitability.