Bozeman Corporation Manufactures an Exercise Machine at a Cost of $800

question 58

Multiple Choice

Bozeman Corporation manufactures an exercise machine at a cost of $800 and sells the machine to Denver Corporation for $1,030 in 2014. Denver incurs TV advertising expenses of $315 and sells the machine by phone order for $1,600. If Bozeman and Denver corporations are members of an expanded affiliated group (EAG) , their DPGR is:

• A) $715.
• B) $800.
• C) $1,285.
• D) $1,600.
• E) None of the above.

---

Definitions:

Short-Run

A period in which at least one factor of production is considered fixed, affecting the ability of businesses to change production levels.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies with the level of production.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the cost of producing one more unit.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good changes as production increases.