Calculate a Firm's Profit Using the Following Information: the Unit

question 16

Multiple Choice

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

• A) $10,000
• B) $50,000
• C) $110,000
• D) $150,000
• E) cannot be determined with the information provided

---

Definitions:

Price Discriminate

Price discrimination is the practice of selling the same product or service at different prices to different customers, often based on willingness to pay, without a corresponding cost difference.

Complementary Demand

Refers to products or services for which the demand increases or decreases together because they are used together, like smartphones and data plans.

Double Markup

A pricing strategy where a product is marked up twice before it reaches the final consumer: first by the wholesaler then by the retailer, leading to a higher final price.

Upstream Firms

Companies involved in the early stages of production or supply chain, such as raw material extraction or initial processing, before manufacturing.