Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:
-What is operating income for 2012?
Definitions:
Long-Run Equilibrium
A state in which all factors of production can be adjusted, markets clear, and no economic agents have the incentive to change their behavior.
Marginal Revenue
The additional income that a business receives from selling one more unit of a good or service.
Economic Profits
The difference between total revenues and total costs, including both explicit and implicit costs.
Short-Run Equilibrium
A state in which market supply and demand balance out at current prices, leading to an economic situation where no incentive exists for prices to change.
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