Refer to the information provided in Table 8.5 below to answer the following questions. Table 8.5 Number of Fruit Baskets 60 10 TFC TVC TCMC $50 SO 50 10 50 15 655 50 21716 8110 96 15 68 118 22 16) Refer to Table 8.5. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $22. To maximize profits, Exotic Fruit should sell_ fruit baskets and their profit is A) three; S5 B) four; $7 C) five; $14 D) six: $14 Answer: D 17) Refer to Table 8.5. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $15. To maximize profits, Exotic Fruit should sell baskets and their profit is A) zero; SO B) two; -$35 C) three; -$26 D) five; -$21 Answer: D fruit 18) If a firm's demand curve is perfectly elastic, then at the profit maximizing level of output A) P = MR = MC. B) P> MR > MC. C) PMR0 and MR = 0. Answer: A 19) If a profit maximizing firm is currently producing where MR = MC, it should A) increase output so that marginal revenue is less than marginal cost. B) decrease output so that marginal revenue will be greater than marginal cost and the firm's profit will increase. C) not change because it is already maximizing profit. D) exit the industry Answer: C Answer the following questions. All calculations must appear on the answer sheet. Question #1: (3 points) Data concerning Tietz Corporation's single product appear below: Per Unit Percent of Sales Selling price...... Variable expenses.......... Contribution margin...... Fixed expenses are $1,044,000 per month. The company is currently selling 9,000 units per month $180 36 $144 100% 20% 80% Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $14 per unit. In exchange, the sales staff' would accept an overall decrease in their salaries of $110,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work