Retleb Manufacturing Company Noticed That, During Its Busiest Month of 20xx

question 68

Multiple Choice

Retleb Manufacturing Company noticed that, during its busiest month of 20xx, maintenance costs totaled $15,400, resulting from the production of 32,000 units. During its slowest month, $12,600 in maintenance costs were incurred, resulting from the production of 24,000 units. Using the high-low method, what maintenance cost would the company expect to incur at a volume of 20,000 units?

• A) $7,000
• B) $11,200
• C) $8,400
• D) $2,800

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Definitions:

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, within a specified time period.

Quantity Supplied

The amount of a product or service that producers are willing and able to sell at a given price level during a specific time period.

Inelastic Demand

A market situation in which the demand for a product does not significantly change with its price increase or decrease.