GoGo Furniture Needs to Purchase Glass Panes to Make Glass

question 78

Multiple Choice

GoGo Furniture needs to purchase glass panes to make glass top coffee tables. Last year GoGo Furniture has two suppliers, BolBol and TolTol. Based on last year's expernece with these two suppliers, GoGo provides you with the following supplier related information:
The supplier performance index of BolBol and TolTol are, respectively:

• A) BolBol 0.30; TolTol 0.05
• B) BolBol 1.20; TolTol 1.03
• C) BolBol 1.30; TolTol 1.05
• D) BolBol 1.51; TolTol 0.40

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Definitions:

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, measuring the firm’s performance beyond its accounting profit.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to any change.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and pricing over their product.

Optimal Level

The most efficient, effective, or desirable point or degree of an activity or function, balancing costs and benefits.