Answered: 8. A bakery currently sells chocolate…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 9MC

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8. A bakery currently sells chocolate chip cookies at a price of $16/dozen. The MC is $8/dozen. The cookies are becoming more popular with customers and so the bakery owner is considering raising the price to $20/dozen. What percentage of customers must be retained to ensure that the price increase is profitable?

Group of answer choices

a. 28.7%

b. 72.4%

c. 33.3%

d. 66.6%

9. Precision Automotive Parts Company (PAP) was in the midst of its strategic planning for the next three years. Historically, its primary focus was on assembly and distribution of a limited number of engine parts for small lower volume auto manufacturers. With new owners, the executives have been tasked with growing revenue at 3x its historical growth rate. Since receiving this directive, it had considered several growth alternatives. During this strategy session, almost all the executives seem to believe that expanding its plant and pursuing larger manufacturers is the best alternative. If it pursues this option, it is pursuing a strategy of

Group of answer choices

a. Transcendent integration

b. Horizontal integration

c. Vertical integration

d. Transfer integration

10. The U.S. Government bought 112,000 acres of land in southeastern Colorado in 1968 for $17,500,000. The cost of using this land today exclusively for the reintroduction of the black-tailed prairie dog

Group of answer choices

a. Is equal to the original purchase price.

b. Is equal to the market value of the land

c. Is zero, because the land represents a sunk cost

d. Is equal to the total dollar value the land would yield if used for farming and ranching

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