Question

1. Companies that sell products whose prices are set by market forces are called

price setters.

price givers.

price leaders.

price takers.

2. Bonita Industries has gathered the following information concerning one model of shoe:

Variable manufacturing costs	$40000
Variable selling and administrative costs	$20000
Fixed manufacturing costs	$160000
Fixed selling and administrative costs	$120000
Investment	$1600000
ROI	30%
Planned production and sales	5000 pairs

What is the total cost per pair of shoes?

$68

$40

$158

$96

Answer 1

1)	Correct Option :price takers.
	When demand and of supply of the product decides its price then market forces sets prices
	it is called as price takers.
2)	Variable manufacturing costs	$40,000
	Variable selling and administrative costs	$20,000
	Fixed manufacturing costs	$160,000
	Fixed selling and administrative costs	$120,000
	Total cost	$340,000
	Total cost per pair = $340000/5000
	=$68