Suzy Co Produces and Sells Three Products (X, Y, and Z)

question 76

Multiple Choice

Suzy Co. produces and sells three products (X, Y, and Z) . The following data relate to the three products: $\begin{array}{lrrrrr}&X&Y&Z\\\text { Demand in units } & 160 & 150 & 140 \\\text { Selling price per unit } & \$ 130 & \$ 160 & \$ 150 \\\text { Raw materials costs per unit } & \$ 65 & \$ 80 & \$ 90 \\\text { Labor time in minutes per unit } & 10 & 20 & 10\end{array}$ Which is the most profitable product if there is no constraint on labor time?

• A) Product X.
• B) Product Y.
• C) Product Z.
• D) More than one of the products has equal total throughput margin per labor minute.
• E) There isn't enough information to answer the question.

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Definitions:

Diminishing Marginal Utility

The principle that as a consumer consumes more of a good or service, the additional satisfaction gained from each additional unit decreases.

Command Systems

Economic systems where the government or a central authority makes all decisions about what goods and services are produced, how they are produced, and who gets them.

Pure Capitalism

An economic system characterized by private property rights and the market allocating resources with little government intervention.

Laissez-Faire Capitalism

Laissez-Faire Capitalism is an economic system where private parties are free from government intervention like regulations, privileges, tariffs, and subsidies, with property rights upheld.