Suppose Chocolate-Covered Prunes Have a Demand Curve That Can Be

question 58

Multiple Choice

Suppose chocolate-covered prunes have a demand curve that can be expressed as and the monopolist that produces them has a total cost curve of
, where Q is output. Assuming the firm maximizes its profits, it will charge a price P = ____.

• A) 85.72
• B) 74.29
• C) 62.35
• D) 60.36

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Definitions:

Variable Manufacturing Overhead

Indirect production costs that vary with the level of output, such as utilities or indirect labor.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating manufacturing overhead to products.

Fixed Manufacturing Overhead

Costs associated with the production process that do not vary with the level of output, including costs like rent, salaries of permanent staff, and machinery depreciation.

Job-Order Costing System

An accounting method that assigns costs to specific production batches or jobs, used for customized orders.