Division a Makes a Part with the Following Characteristics

question 15

Multiple Choice

Division A makes a part with the following characteristics: Division B, another division of the same company, would like to purchase 5,000 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $24 each.
-Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A sells the parts to Division B at $24 per unit (Division B's outside price) , the company as a whole will be:

• A) better off by $5,000 each period.
• B) worse off by $15,000 each period.
• C) worse off by $5,000 each period.
• D) There will be no change in the status of the company as a whole.

Analyze the impact of changes in demand and supply on market equilibrium.

Identify the concepts of consumer and producer surplus.

Apply the law of demand in different market scenarios.

Examine the effects of income variations on the demand for goods.

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Definitions:

Hunger

A physical sensation or condition resulting from the need for food intake.

Frustration

A feeling of dissatisfaction, often accompanied by anxiety or depression, resulting from unmet needs or unresolved problems.

Pain

An unpleasant sensory and emotional experience associated with actual or potential tissue damage or described in terms of such damage.

Self-awareness

The conscious knowledge of one's own character, feelings, motives, and desires, which can play a key role in personal development.