Carroll Company Has Two Product Lines, Q and P

question 1

Multiple Choice

Carroll Company has two product lines, Q and P. During June, the company's net operating income was £25,000, and the common fixed expenses were £37,000. The contribution margin ratio for Q was 30%, its sales were £200,000, and its segment margin was £21,000. If the contribution margin for P was £80,000, the segment margin for P was

• A)£62,000.
• B)£59,000.
• C)£62,000
• D)£41,000.

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Definitions:

Revenue Maximization

A strategy or objective focused on increasing the total income generated from sales or services, without necessarily maximizing profit.

Cournot Equilibrium

The Cournot equilibrium is a concept in economic theory where firms reach a state of balance in quantity and price in a duopoly, where each firm's output decision best responds to the output decision of the other firm.

Downward-Sloping

A term describing a curve or line that decreases in value as it moves from left to right, often used to describe demand curves in economics.

Cournot Equilibrium Price

A concept in oligopoly theory where each firm chooses its quantity to maximize profit, assuming the other firms' quantities remain fixed, leading to a stable market price.