Calculation of Average Costs with Economies of Scope Baby Supplies

question 88

Multiple Choice

Calculation of Average Costs with Economies of Scope Baby Supplies is considering a merger with Tot Toy Stores. Baby's total operating costs of producing services are $450,000 for sales volume of $2.15 million. Tot's total operating costs of producing services are $250,000 for a sales volume (J_P) of $975,000. Calculate the average cost of production for the Baby and Tot Toy firms, respectively.

• A) 11.63%, 20.93%
• B) 20.93%, 25.64%
• C) 46.15%, 11.63%
• D) 22.4%, 22.4%

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Definitions:

Stimulus

Anything in the environment that elicits a response from an organism or a psychological system.

Place Theory

A theory in hearing that proposes the perception of sound pitch is determined by the location of maximum vibration on the basilar membrane of the inner ear.

Pitch Perception

The ability of an individual to recognize and differentiate sounds based on their frequency, enabling us to identify musical notes, tones, and the inflection in speech.

Basilar Membrane

A structure in the cochlea of the inner ear that plays a key role in the sense of hearing by vibrating in response to sound.