Ahrends Corporation makes 46,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is below: Direct materials $14.30
Direct labor 23.90
Variable manufacturing overhead 3.00
Fixed manufacturing overhead 28.30
Unit product cost $69.50

An outside supplier has offered to sell the company all of these parts it needs for $6700 a unit If the company accepts this offer, the facilities now being used to make the pert could be used to make more units of o product that is in high demand. The additional contribution margin on this other product would be $424,000 per year f the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $28.40 of the fixed manufacturing overhead cost being applied to the pert would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.

Required:
What is the maximum amount the compeny should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 53,000 units required eoch year?

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.

The rybczynski theorem describes: (a) how commodity price changes influence real factor rewards (b) how commodity price changes influence relative factor rewards. (c) how changes in factor endowments cause changes in commodity outputs. (d) how trade leads to factor price equalization.

If a product goes up in price, and the demand for it drops, that product's demand is a. elastic b. inelastic c. stable d. fixed select the best answer from the choices provided