Refer to the Data Provided in Table 16 -Refer to Table 16

question 114

Multiple Choice

Refer to the data provided in Table 16.1 below to answer the following questions.
Table 16.1 $$\begin{array} { c l l } \text { Tons of Salt } & \text { MC } & \text { MSC } \\\hline 1 & 10 & 20 \\2 & 20 & 30 \\3 & 30 & 40 \\4 & 40 & 50 \\5 & 50 & 60\end{array}$$
-Refer to Table 16.1. This salt processing firm is perfectly competitive and is forced to take damage costs into account. If the market price of the product is $30, the firm will produce

• A) 0 tons of salt.
• B) 2 tons of salt.
• C) 3 tons of salt.
• D) 4 tons of salt.

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Definitions:

Contribution Margin

The gap between sales income and variable expenses, showing the extent to which income aids in addressing fixed costs and creating profit.

Selling Price

The amount of money charged for a product or service, or the sum a customer is willing to pay.

Fixed Manufacturing Cost

Expenses that do not change with the volume of production, such as rent, salaries, and insurance costs related to manufacturing facilities.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.