[The Following Information Applies to the Questions Displayed Below

question 31

Multiple Choice

[The following information applies to the questions displayed below.]
Creative Star Corporation produces three lines of desks from wood: Classic,Royal,and Standard.Cost and revenue data pertaining to each product are shown below:
Classic desks require five square yards of wood,Royal requires ten square yards,and Standard requires three square yards.High demand for each product line far exceeds the company's production capacity.
-If Creative Star Corporation has only 250,000 square yards of wood available,what is the highest total amount of fixed cost the company can incur and still break-even?

• A)$2,500,000
• B)$4,000,000
• C)$5,000,000
• D)$6,000,000

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Definitions:

Inverse Demand Function

A mathematical function that expresses price as a function of quantity demanded, illustrating how the price necessary to sell a given quantity changes.

Price

The amount of money required to purchase a good or service, often determined by supply and demand dynamics in the market.

Income

Funds accumulated over time from work or investing efforts, usually received systematically.

Utility Function

A representation in economics of how a consumer ranks different bundles of goods according to their level of satisfaction or happiness.