Pronto Ltd manufactures photo frames and photo albums but 15 000 units of photo frames could be purchased for $5.00 each. The per-unit costs of production for these frames are: If the frames were purchased and later sold by Pronto at normal prices, the overall profits would:
A) decrease relative to those from making the frames.
B) increase relative to those from making the frames.
C) remain the same as those from making the frames.
D) increase for the first three months and decrease thereafter.

Question

Pronto Ltd manufactures photo frames and photo albums but 15 000 units of photo frames could be purchased for $5.00 each. The per-unit costs of production for these frames are:  If the frames were purchased and later sold by Pronto at normal prices, the overall profits would:
A) decrease relative to those from making the frames. 
B) increase relative to those from making the frames. 
C) remain the same as those from making the frames. 
D) increase for the first three months and decrease thereafter.

Quizplus · Accepted Answer

The Answer of Pronto Ltd manufactures photo frames and photo albums but 15 000 units of photo frames could be purchased for $5.00 each. The per-unit costs of production for these frames are:  If the frames were purchased and later sold by Pronto at normal prices, the overall profits would:
A) decrease relative to those from making the frames. 
B) increase relative to those from making the frames. 
C) remain the same as those from making the frames. 
D) increase for the first three months and decrease thereafter.

Pronto Ltd Manufactures Photo Frames and Photo Albums but 15