Figure 17-2 Wannabee Company Manufactures a Product with the Following Costs Per

question 94

Multiple Choice

Figure 17-2
Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:
The company has the capacity to produce 90,000 units. The product regularly sells for $120.
-Refer to Figure 17-2. If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a

• A) $45,000 increase.
• B) $153,000 increase.
• C) $450,000 increase.
• D) $90,000 decrease.

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Definitions:

Demand

The amount of a product or service that buyers are ready and capable of buying at different price levels over a specified time frame.

Increase

A situation where there is a growth or rise in figures, amounts, or indicators in an economic context.

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.