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The Electronics Division of an automobile manufacturer is operating at capacity. It produces a radio selling for $91 in a competitive market. At the current

The Electronics Division of an automobile manufacturer is operating at capacity. It produces a radio selling for $91 in a competitive market. At the current production level, the fixed cost per radio is $28 and the variable cost is $49 per radio. One of the automobile divisions would like to buy the radio for use in place of a similar model priced at $95. What price should the automobile division pay the Electronics Division for the radio?

$49

$77

$91

$95

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