Refer to the Scenario Below to Answer the Following Questions

question 70

Multiple Choice

Refer to the scenario below to answer the following questions.
Breakeven Analysis at MRI (Scenario)
Mike has just been hired as a sales manager at Mobile Research Inc. (MRI) , makers of the popular Blueberry wireless phone. At his first management briefing, Mike is informed that the company is losing money, despite the immense popularity of the Blueberry phone. He learns that the company is facing intense competition from its main rival, Mandarin Communications, makers of the M-Phone. The M-Phone has the same popular features as the Blueberry and sells for $40 less. When Mike asked about the cost structure for the Blueberry he was informed that the selling price is $200, variable costs are $120, and total fixed costs are $800,000 per month.
-MRI decided to reduce their selling price and match the M-Phone at $160. The next month they sold 32,500 Blueberry phones and earned a profit of __________.

• A) $100,000
• B) $200,000
• C) $300,000
• D) $400,000
• E) $500,000

---

Definitions:

Higher Tariffs

Increased taxes imposed on imported goods, typically used to protect domestic industries from foreign competition and raise government revenue.

U.S. Jobs

Employment opportunities available in the United States, encompassing various sectors, industries, and roles.

Imports

Items or offerings that enter into a nation from abroad aimed at being sold or employed.

Domestic Supply and Demand

Refers to the quantity of a product or service available and the desire for it within a single country.