The "On the Road" bicycle manufacturing company sold 500 bicycles last year. Their fixed costs were $10 per unit, and their variable costs were $15 per unit. If each bike sells for $100, most likely the company had a

A. total profit of $37,000.
B. total profit of $50,000.
C. total loss of $37,000.
D. total loss of $50,000.
E. the company broke even.

(A) A total profit of $37,000

Explanation:

Number of bicycles sold last year = 500

Assuming the company only manufactured 500 bicycles last year.

Fixed cost per unit = $10

Variable cost per unit = $15

Total cost per unit = fixed cost + variable cost = $10 + $15 = $25

Total cost for 500 units of bicycles manufactured = 500 × $25 = $12,500

Selling price per bike = $100

Total revenue for 500 bikes sold = 500 × $100 = $50,000

The company made a profit because the total revenue generated is greater than the total cost incurred.

Total profit = total revenue - total cost = $50,000 - $12,500 = $37,500

The company most likely had a profit of $37,000

answer; bootstrapping is your answer;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.