Calculation of Average Costs with Economies of Scope Blinds N

question 86

Multiple Choice

Calculation of Average Costs with Economies of Scope Blinds N Such is considering a merger with Window Supply Stores. Blinds' total operating costs of producing services are $750,000 for sales volume of $6 million. Window's total operating costs of producing services are $100,000 for a sales volume (J_P) of $1 million. For a sales volume of $7 million, calculate the reduction in production costs the merged firms need to experience such that the total average cost (TAC) for the merged firms is equal to 12%.

• A) decrease of $840,000
• B) decrease of $10,000
• C) decrease of $40,000
• D) decrease of $90,000

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Definitions:

Tubules

Small tubes or tunnel-like structures found in various organs and tissues, involved in transport and filtration processes.

Nuclear Receptor

A type of intracellular protein that, upon binding to specific molecules, can regulate the expression of certain genes.

Membrane-bound Receptor

A protein molecule embedded in the cell membrane that receives chemical signals from outside the cell and, upon binding with a specific ligand, initiates a cellular response.

Nuclear Receptor

Nuclear receptors are a class of proteins found within cells, that on binding with a specific ligand, can directly regulate the expression of specific genes.