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Use the following to answer questions 24-26: CHAVEZ CORP (15 POINTS) CHAVEZ CORP. currently sells 1 product, Product A. CHAVEZ estimates demand and costs of
Use the following to answer questions 24-26: CHAVEZ CORP (15 POINTS) CHAVEZ CORP. currently sells 1 product, Product A. CHAVEZ estimates demand and costs of Product A at various activity levels as follows: Units Sold 120 140 160 Price $48 $45 $40 Total Variable costs $3,000 $3,500 $4,000 Fixed Costs $1,000 $1,000 $1,000 24. What price should CHAVEZ charge maximize profits? $ 25. How much profit will CHAVEZ have if a price of $48 is charged? 26. How would you best describe CHAVEZ's variable cost per unit over the range shown? A) It is constant B) It is increasing as volume increases C) It is decreasing as volume increases D) It is first increasing as volume increases, then decreasing. 27. EXTRA-SUPER-DUPER-AMAZING BONUS QUESTION: You are starting a new company. You would want to name it Page 7
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