Additup Ltd Manufactures and Markets Pocket Calculators Which Sell at £22

question 16

Multiple Choice

Additup Ltd manufactures and markets pocket calculators which sell at £22 each. Current output is 40000 units per month, which represent 90% of the plants capacity. A new chain-store offers to buy up to 5000 calculators as a special order at £18 per unit and requires these immediately. These would sell under their own brand name. Total costs per month are £800000 of which £192000 are fixed costs. Assuming that the company maximises profits what is the profit made:

• A) £272 532
• B) £312000
• C) £242 458
• D) £204 432

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Definitions:

Exaggerated Blink

An exaggerated blink is a heightened blinking response that may occur as a reaction to stimuli or due to certain neurological conditions.

Inferior Oblique

A muscle in the eye that contributes to the upward and outward movement of the eyeball.

Optic Canal

A narrow passageway in the sphenoid bone of the skull through which the optic nerve and ophthalmic artery pass to the eye.

Agonist

A substance that fully activates the receptor it binds to, producing a maximal biological response.