A Division of Chapman Corporation Manufactures a Pager

question 62

Multiple Choice

A division of Chapman Corporation manufactures a pager. The weekly fixed cost for the division is $15,000, and the variable cost for producing x pagers/week is dollars. The company realizes a revenue of dollars from the sale of x pagers/week. ​What is the profit for the company if 2,000 units are produced and sold each week?
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• A) $112,000
• B) $117,000
• C) $107,000
• D) $102,000
• E) $97,000

Recognize the role of legal protections such as patents, trademarks, and copyrights in incentivizing innovation and protecting intellectual property.

Understand the implications of first-mover advantages in the market and how they can provide a competitive edge to firms.

Identify how market structures influence firms’ ability and incentives to finance R&D.

Appreciate the government's role in supporting basic scientific research and its impact on technological innovation.

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Definitions:

Marginal Revenue Product

The additional revenue generated from using one more unit of input.

Marginal Product

The extra output generated from increasing a particular input by one unit while keeping all other inputs unchanged.

Output

The total amount of goods or services produced by a firm or economy over a specific period of time.

Derived Demand

The demand for a factor of production or intermediate good resulting from the demand for another good or service, such as the demand for steel being driven by the demand for automobiles.