George's Dry Cleaning Is Considering a Merger with Weezzie's Laundry

question 4

Multiple Choice

George's Dry Cleaning is considering a merger with Weezzie's Laundry Supply Stores. George's total operating costs of producing services are $590,000 for sales volume (S_G) of $4.7 million. Weezzie's total operating costs of producing services are $152,000 for a sales volume (S_W) of $2.3 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 9%.

• A) $97,000
• B) $101,000
• C) $112,000
• D) $128,000

---

Definitions:

Axes

Reference lines used in graphs and charts to show data points and support the visualization of trends, typically including horizontal (x-axis) and vertical (y-axis) lines.

Evaluating

The process of assessing or judging the value, significance, or condition of something, typically following certain criteria or standards.

Abnormal Behavior

Actions or behaviors that deviate significantly from what is considered normal or typical.

Personal Distress

A negative emotional response individuals feel when witnessing others in distress, motivating them to alleviate both their own and others' suffering.