Tree Top Furniture Has Current Sales of $287,600 and Fixed

question 37

Multiple Choice

Tree Top Furniture has current sales of $287,600 and fixed assets of $314,000.The firm is currently operating at 96 percent of capacity.What is the maximum percentage increase the firm can have in sales without investing in additional fixed assets?

• A)4)17%
• B)4)00%
• C)6)72%
• D)3)92%
• E)6)33%

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Definitions:

Demand

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Indifference Curves

Graphs used in economics to show combinations of two goods that provide equal satisfaction and utility to a consumer.

Budget Line

A graphical representation of all possible combinations of two goods which can be purchased with a given budget at fixed prices.

Utility Function

A utility function is a mathematical representation in economics that depicts an individual's preference ranking over a set of goods or outcomes, showing the level of satisfaction or utility derived from them.