CHOI CORP. currently sells 1 product, Product A. The company estimates demand and costs of Product A at various activity levels as follows:

Units Sold Price Total Variable costs Fixed Costs

120 $48 $3,000 $1000

140 $45 $3,500 $1000

160 $40 $4,000 $1000

A. What price should CHOI charge to maximize profits? $_________________

B. How much profit will CHOI have if a price of $48 is charged? $__________________ ___

C. How would you best describe CHOI's variable cost per unit over the range shown?

1) It is constant

2) It is increasing as volume increases

3) It is decreasing as volume increases

4) It is first increasing as volume increases, then decreasing.