Use the Following Table to Answer the Following Questions -If the Firm Does Not Bundle the Products, What Single

question 46

Multiple Choice

Use the following table to answer the following questions
$$\begin{array} { | c | c | c | } \hline \text { Customer } & \begin{array} { c } \text { Product A } \\\text { Reservation Price }\end{array} & \begin{array} { c } \text { Product B } \\\text { Reservation Price }\end{array} \\\hline 1 & 1,000 & 200 \\\hline 2 & 800 & 400 \\\hline \text { Marginal Cost } & 500 & 100 \\\hline\end{array}$$
-If the firm does not bundle the products, what single price should the firm charge for product B to maximize profit?

• A) 100
• B) 200
• C) 300
• D) 400

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Definitions:

Processing Activity

Tasks or operations involved in transforming raw materials into finished goods or services, often part of the production process.

Activity-Based Costing

A costing methodology that assigns expenses to products or services based on the activities that go into their production or delivery.

Machine-Hours

A unit of measure representing the operating time of a machine, used in cost accounting to allocate machine-related overheads to products.

Product Margin

The profit made on selling a product, calculated by deducting the total cost of production from the sales revenue of the product.