Sohr Corporation Processes Sugar Beets That It Purchases from Farmers

question 98

Multiple Choice

Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $50 to buy from farmers and $15 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $20 or processed further for $19 to make the end product industrial fiber that is sold for $58. The beet juice can be sold as is for $41 or processed further for $23 to make the end product refined sugar that is sold for $58.
-Which of the intermediate products should be processed further?

• A)beet fiber should NOT be processed into industrial fiber;beet juice should be processed into refined sugar
• B)beet fiber should NOT be processed into industrial fiber;beet juice should NOT be processed into refined sugar
• C)beet fiber should be processed into industrial fiber;beet juice should be processed into refined sugar
• D)beet fiber should be processed into industrial fiber;beet juice should NOT be processed into refined sugar

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Definitions:

Price Elasticity

A parameter for gauging the response of demand to price variations of a product.

Excise Tax

A tax levied on the sale or consumption of specific goods or services, such as alcohol, tobacco, and gasoline.

Taxable Income

The amount of an individual's or corporation's income used to determine how much tax is owed to the government.

Progressive Income-tax

A tax system where the tax rate increases as the taxable amount increases, typically imposing higher taxes on higher income earners.