Ashlee Patterson, a student of economics, argues that product differentiation by these firms will reduce economic welfare. However, Tony Prescott, her friend, disagrees. According to Tony, social welfare will increase because consumers now have more choices. While claiming that social welfare will increase because consumers now have more choices Tony is ignoring the fact that: A. product differentiation allows firms to enjoy monopoly power. B. producer surplus increases when firms differentiate their products from what their rivals offer. C. different people have different preferences. D. efficiency under monopoly is lower than efficiency under monopolistic competition. E. firms selling identical products face perfectly elastic demand curves.

Kubin company’s relevant range of production is 18,000 to 22,000 units. when it produces and sells 20,000 units, its average costs per unit are as follows: average cost per unit direct materials $ 7.00 direct labor $ 4.00 variable manufacturing overhead $ 1.50 fixed manufacturing overhead $ 5.00 fixed selling expense $ 3.50 fixed administrative expense $ 2.50 sales commissions $ 1.00 variable administrative expense $ 0.50 required: 1. for financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. for financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units? 3. for financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. for financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units?