White Labs Is a Wholesaler Who Sells Microscopes for Use

question 91

Multiple Choice

White Labs is a wholesaler who sells microscopes for use in high schools to retailers.On August 1 White contracts with the XYZ to sell 1,000 microscopes to XYZ to be delivered September 1.The contract price is set at $300 each,with a 10% volume discount if sales exceed 2,500 microscopes within the year.The probability of sales of 2,500 microscopes is expected to be 55%.Using the most-likely-amount approach the consideration to be recognized is estimated to be ________.

• A)$270,000
• B)$300,000
• C)$165,000
• D)$100,000

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Definitions:

Price Ceiling

A government-imposed maximum price that can be charged for a good or service, intentionally set below the market equilibrium to protect consumers.

Shortage

A situation in which the demand for a good or service exceeds its supply in a market.

Price Floor

A minimum price set by the government or a regulatory body, below which a particular good or service cannot legally be sold.

Surplus

An excess quantity, especially referring to the situation where supply exceeds demand in a market, often leading to a decrease in prices.