If the Monopolist Shown in the Following Figure Could Implement

question 10

Multiple Choice

If the monopolist shown in the following figure could implement a two-part tariff,the entry fee would be:

• A) $0.
• B) $225.
• C) $450.
• D) $900.
• E) $1,200.

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Definitions:

Direct Materials Cost

The cost of materials that are an integral part of the finished product.

Units Produced

The total number of units of product a company manufactures over a specific period of time.

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Relevant Activity Base

A factor that directly influences the costs incurred during a business activity, used for allocating costs in activity-based costing.