Ajax Corporation Is Performing a Sensitivity Analysis on One of Its

question 92

Multiple Choice

Ajax Corporation is performing a sensitivity analysis on one of its product.The product currently sells for $210 per unit, with variable cost of $90 per unit and fixed costs of $400,000.Ajax currently sells 12,000 units of this product.Ajax is considering raising its price by 15%.If prices increase, then it is expected that units sold will decrease by 10%.Calculate the change in operating income.

• A)$196,200 decrease
• B)$248,500 decrease
• C)$196,200 increase
• D)$248,500 increase

Understand the relationship between marginal cost, marginal revenue, and output for profit maximization in monopolies.

Comprehend the concept and implications of a natural monopoly.

Distinguish between monopolies and perfectly competitive firms based on revenue, cost structures, and output decisions.

Identify the characteristics and examples of natural monopolies and their regulation by governments.

---

Definitions:

Cover Message

A cover message is a written introduction or letter, often accompanying a resume, that provides context for the application, highlights key qualifications, and motivates the recipient to consider the applicant.

Candidate's Skills

The specific abilities and expertise that a job applicant possesses, relevant to the job they are applying for.

Hidden Job Market

Employment opportunities that are not advertised or publicly known, often filled through networking, referrals, or internal recruitment.

Work History

A record of a person's employment background, including job positions held, durations, responsibilities, and achievements.