Answer the following questions using the information below:
Gerry's Generator Supply is approached by Mr. Sandman, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Gerry's Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

-If Mr. Sandman wanted a long-term commitment for supplying this product, what price would most likely be quoted to him?
A)$2,000
B)$2,150
C)$2,580
D)$2,800

Question

Answer the following questions using the information below:
Gerry's Generator Supply is approached by Mr. Sandman, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Gerry's Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:
 
-If Mr. Sandman wanted a long-term commitment for supplying this product, what price would most likely be quoted to him?
A)$2,000 
B)$2,150 
C)$2,580 
D)$2,800

Quizplus · Accepted Answer

Since Mr. Sandman is a new customer and the order is long-term, the price would most likely be higher than the price offered to regular customers. Based on the range given in the table, the closest option is $2,580. Option C is the best choice.

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