56) The effect of price changes on sales volume is

A) marginal revenue.

B) price elasticity.

C) maximization of profits.

D) imperfect competition.

57) In perfect competition, the profit-maximizing volume is the quantity at which

A) marginal cost equals marginal revenue.

B) marginal revenue exceeds marginal cost.

C) marginal revenue exceeds price.

D) price exceeds marginal cost.

58) A firm can sell as much of a product as it can produce at a single market price in

A) perfect competition.

B) imperfect competition.

C) price elasticity.

D) a marginal cost curve.

59) A firm price will influence the quantity it sells in

A) perfect competition.

B) imperfect competition.

C) price elasticity.

D) a marginal cost curve.

60) ________ is the additional cost resulting from producing and selling one additional unit.

A) Perfect competition

B) Unit cost

C) Marginal cost

D) Product cost

Van Horn, Inc. has been producing and selling 20,000 meters a year.  The company has the capacity to produce 25,000 meters with its present facilities.  The following information is also available:

Selling price per unit


Variable costs per unit:Manufacturing


Selling and Administrative


Fixed costs in total:Manufacturing


Selling and Administrative


61) The least that Van Horn would be willing to sell a meter for in the short run would be

A) $160.00.

B) $300.00.

C) $48.00.

D) $66.40.

62) The product strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide an adequate profit margin is referred to as

A) full costing.

B) target costing.

C) predatory pricing.

D) discriminatory pricing.

63) Predatory pricing is establishing prices so low that competitors are driven out of the market so that the surviving company then has no significant competition and can

A) sell as much as it produces.

B) lower prices to stimulate the economy.

C) raise prices dramatically.

D) discriminate against certain customers.

64) Charging different prices to different customers for the same product or service is known as

A) predatory pricing.

B) target costing.

C) full costing.

D) discriminatory pricing.

65) The amount by which price exceeds cost is the

A) marginal cost.

B) marginal revenue.

C) full cost.


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