A Firm with Market Power Has an Individual Consumer Demand

question 112

Multiple Choice

A firm with market power has an individual consumer demand of Q = 20 − 4P and costs of C = 4Q.What is optimal price to charge for a block of 20 units?

• A) $18
• B) $36
• C) $72
• D) $90

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Definitions:

Direct Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, multiplied by the actual quantity purchased.

Actual Costs

The real expenses incurred for goods, services, or other operational activities during a specific period of time.

Standard Costs

The practice of assigning an expected cost to products, with the aim of assessing performance by comparing these costs to actual costs.

Direct Labor Time Variance

The cost associated with the difference between the actual hours and the standard hours of direct labor spent producing a commodity multiplied by the standard direct labor rate per hour.