Yang Manufacturing Makes a Product Called Yin

question 69

Multiple Choice

Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2500 units and 10 000 units of Yin per month. Per unit costs at two activity levels are as follows: 5000 units at $17.00 per unit; 7500 units at $13.00 per unit. Determine their total cost if Yang produces 10 000 units.

• A) $130 000
• B) $125 000
• C) $110 000
• D) $100 000

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Definitions:

Cartel

A group of producers that agree to control prices and output levels to maximize collective profits, often at the expense of competition.

Industry Profits

The total earnings of companies within a particular sector, after subtracting the costs of production and operation.

Output

The total amount of goods or services produced by a firm or an economy.

Overt Collusion

Overt collusion occurs when companies openly agree on prices, production levels, or market shares, in violation of free-market principles and often against the law.