Macaulay Company Has Three Product Lines-D, E, and F

question 66

Multiple Choice

Macaulay Company has three product lines-D, E, and F. The following information is available: Macaulay Company is thinking of dropping product line F because it is reporting an operating loss. Assuming fixed costs are unavoidable, if Macaulay Company drops product line F, and rents the space formerly used to produce product F for $17,000 per year, total income will be:

• A)$10,000.
• B)$12,000.
• C)$20,000.
• D)$25,000.

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Definitions:

World Price

The international market price of a good or service, determined by global supply and demand, which influences domestic prices and competition.

International Trade

The exchange of goods, services, and capital across international borders or territories, driven by economic motives like gaining access to new markets or acquiring resources.

Unilateral Approach

A strategy or action taken by a single nation or entity independently, without coordination with others.

Free Trade

Free Trade is a policy where governments do not discriminate against imports or interfere with exports, allowing goods to move freely between countries.