The Selling Price of a Unit Is $20 and the Variable

question 77

Multiple Choice

The selling price of a unit is $20 and the variable product cost per unit is $14. In addition, a sales commission of 5% is paid on each sale. If the variable cost per unit $\textbf{ excluding }$ sales commission increases by 1%, what will be the new total cost per unit?

• A) $14.84
• B) $14.85
• C) $14.90
• D) $15.14

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Definitions:

Tax

A fundamental fiscal obligation or alternative sort of levy placed upon a taxpayer by a government power, promoting government funding and assorted investments in public infrastructure.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they do pay, reflecting the economic benefit obtained by consumers.

Tax Revenue

Tax revenue represents the income that a government receives from taxing individuals and businesses within its jurisdiction.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand in a market.