Consider the Following Data for Three Divisions of a Company

question 89

Multiple Choice

Consider the following data for three divisions of a company, X, Y, and Z:
$\begin{array}{lrrr}\text { Divisional: } & \text { X } & \text { Y } & \text { Z } \\\text { Sales } & \$ 1,800,000 & \$ 900,000 & \$ 4,800,000 \\\text { Operating Income } & 252,000 & 108,000 & 240,000 \\\text { Investment in assets } & 630,000 & 540,000 & 3,000,000\end{array}$ The asset turnover (AT) for Division Y is calculated to be (rounded) :

• A) 1.43.
• B) 1.60.
• C) 1.67.
• D) 2.86.
• E) 3.33.

Explain the principle of profit maximization and its application in perfectly competitive markets.

Recognize the effects of market changes (e.g., entry/exit of firms, demand shifts) on firm strategies and market equilibrium.

Understand the role of production costs in determining firm behavior and market outcomes.

Identify the factors leading to the differentiation between perfectly competitive and non-perfectly competitive markets.

---

Definitions:

Reticular Formation

A network of neurons located in the brainstem that is involved in controlling arousal and consciousness.

Electroencephalogram

A test that detects electrical activity in the brain using small, metal discs attached to the scalp, often used in the diagnosis and monitoring of neurological conditions.

Electrical Energy

Energy derived from electric potential or kinetic energy, which is commonly used for power generation and distribution in households and industries.

Wavy Lines

Lines that exhibit a series of smooth, curving shapes, often used in art and design to suggest movement or variability.