A Company Sells Two Products with Information as Follows

question 129

Multiple Choice

A company sells two products with information as follows:

The products are machine made.Four units of product A can be made with one machine hour,and two units of product B can be made with one machine hour.The company has a maximum of 3000 machine hours available per month.The company can sell up to 17,000 units of product A per month and up to 3000 units of product B for the month.What is the maximum amount of contribution margin that the company could earn in a month given the stated constraints?

• A)$17,000
• B)$30,000
• C)$6000
• D)$24,000

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Definitions:

Percent Change

A mathematical calculation that describes the degree of change over time, expressed as a percentage.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded for a given period.

Price Ceiling

a legally established maximum price for goods or services, aimed at keeping prices from rising to high levels.

Equilibrium

A condition in markets where supply equals demand, and there is no external pressure for change.