Exhibit 13-4

-Exhibit 13-4 shows data gathered by Memo Co. as it prepares to purchase personal computers for its sales offices. Given the data in Exhibit 13-4, the price of personal computers must be

Question

Exhibit 13-4
 
-Exhibit 13-4 shows data gathered by Memo Co. as it prepares to purchase personal computers for its sales offices. Given the data in Exhibit 13-4, the price of personal computers must be

Quizplus · Accepted Answer

Looking at the data in Exhibit 13-4, we see that as the quantity of computers purchased increases, the unit cost decreases. This is known as economies of scale, where the cost per unit decreases as production quantity increases.

At a quantity of 200 computers, the unit cost is $500. At a quantity of 400 computers, the unit cost is $400. At a quantity of 800 computers, the unit cost is $300. And at a quantity of 1,600 computers, the unit cost is $250.

Therefore, based on the data provided, the price of personal computers must be $250 each.

Exhibit 13-4 -Exhibit 13-4 Shows Data Gathered by Memo Co. as It