A Cellphone Maker Sells 6,000 Units Per Month at $600

question 217

Multiple Choice

A cellphone maker sells 6,000 units per month at $600 each.The firm is investigating whether a price cut to $500 is warranted.The firm's marginal cost of production of each phone is a constant $400 per unit.To maintain profits at their current level, quantity sold must increase to at least

• A)8,000
• B)10,000
• C)12,000
• D)15,000

---

Definitions:

Flexible Capacity

Denotes the ability of a business or production system to adjust output levels or operations in response to changes in demand or market conditions.

Demand Uncertainty

The inability to accurately forecast consumer demand, leading to challenges in supply chain planning and inventory management.

Price Uncertainty

The unpredictability of the cost of goods or services in the future, affecting budgeting and planning.

Warehousing Space

The area available for the storage of goods in a warehouse, crucial for inventory management and logistics.