Suppose Two Types of Consumers Buy Suits

question 47

Multiple Choice

Suppose two types of consumers buy suits.Consumers of type A will pay $100 for a coat, and $50 for pants.Consumers of type B will pay $75 for a coat, and $75 for pants.The firm selling suits faces no competition and has a marginal cost of zero.If the firm charges $75 for pants and $75 for a coat, the firm will sell a coat to:

• A)type A consumers.
• B)type B consumers.
• C)type A consumers and type B consumers.
• D)none of the statements associated with this question are correct.

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Definitions:

Lead Time

The time span between the initiation and completion of a process, such as the ordering of goods and their delivery.

Bill of Material

A comprehensive list detailing all the components, materials, and parts required to manufacture a product, including quantities and specifications.

Inventory

An accounting term referring to the goods and materials held by a business for the purpose of resale or production.

Lot-For-Lot

An ordering system where the exact quantity needed for production is ordered, minimizing inventory holding costs.