A Company Has Already Incurred a $55,000 Cost in Partially

question 75

Multiple Choice

A company has already incurred a $55,000 cost in partially producing its three products.Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing.Based on this information,should any products be processed further?
$$\begin{array} { | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \text { A } & \$ 72 & \$ 108 &\$3 5 \\\hline \text { B } & 83 & 124 & 42 \\\hline \text { C } & 94 & 141 & 45 \\\hline\end{array}$$

• A) All of these products should be processed further.
• B) None of these products should be processed further.
• C) Products A and B should be processed further.
• D) Products B and C should be processed further.
• E) Products A and C should be processed further.

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Definitions:

Oligopolistic Collusion

When a few firms in an oligopoly market secretly agree to fix prices, limit production, or divide markets among themselves to reduce competition and increase profits.

Unstable Demand Conditions

A situation in which the demand for goods or services experiences frequent and unpredictable fluctuations.

Secret Price Cuts

Price reductions on goods or services that are not publicly advertised or disclosed to all customers.

Less Attractive

This describes a decrease in appeal or desirability of an object, person, or concept compared to another.