Location Choice I Has Monthly Fixed Costs of $100,000 and Per-Unit

question 4

Multiple Choice

Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 550 units?

• A)$105,200
• B)$102,500
• C)$100,250
• D)$100,520
• E)$105,500

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Definitions:

Fed's Legal Reserve Requirements

The minimum reserves each bank must hold to customer deposits and notes, as mandated by the Federal Reserve.

Reserve Requirement

The amount of funds that a bank must hold in reserve against deposits made by its customers, a regulatory measure to ensure banks can meet withdrawal demands.

Deposit Multiplier

The ratio that measures the potential impact of a change in banking reserves on the money supply, indicating how much money banks can create with each dollar of reserves.

Fed Funds Rate

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight, a vital monetary policy tool used by the Federal Reserve.