Use the Following Table to Answer Questions 15 - 18

question 22

Multiple Choice

Use the following table to answer questions 15 - 18
Assume the cost of producing the goods is zero

-Suppose the monopolist only sold the goods separately.What prices will the monopolist charge for Good 1 to maximize revenues for good 1?

• A)$4,500
• B)$5,000
• C)$1,500
• D)$1,000

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Definitions:

Budgeted Activity Rate

The estimated rate or cost of business activities based on the budget for a specific period, often used for forecasting and planning purposes.

Reciprocal Services Method

A method of allocating service department costs to producing departments by considering the interdepartmental exchanges of services.

Support Department Costs

The costs associated with functions that assist the direct production or service departments of an organization, such as maintenance and administration.

Overhead Rates

The ratio used to allocate indirect costs to products or services, typically based on a measure such as labor hours or machine hours.