Use the Following Information to Answer the Questions Below

question 12

Multiple Choice

Use the following information to answer the questions below.
You currently make a part for old equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year (see table) .

-Refer to the instruction above. For what range of output would you prefer to make?

• A) 30,000 or more units per year
• B) 0 - 30,000 units per year
• C) 0 - 40,000 units per year
• D) 40,000 or more units per year

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Definitions:

High Point

The highest value or peak that an economic indicator or a market index reaches over a specific time period.

Capital Goods

Long-lasting goods used in the production of other goods or services, such as buildings, machinery, and equipment.

Money Supply

This refers to the total amount of monetary assets available in an economy at a specific time.

Inflation Rate

The pace at which prices for goods and services across the board escalate, resulting in the diminishing value of money.