X Segment has excess capacity. It produces product X at total product cost of 100 (includes 20 FC). X Segment normally sells the product X to customers at 150 per unit. Y Segment needs product X, normally, they purchase it from outsider at 180 per unit. What is the maximum
X Segment has excess capacity. It produces product X at total product cost of 100 (includes 20 FC). X Segment normally sells the product X to customers at 150 per unit. Y Segment needs product X, normally, they purchase it from outsider at 180 per unit. What is the maximum
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Explain the answer.
![X Segment has excess capacity. It
produces product X at total product
cost of 100 (includes 20 FC). X
Segment normally sells the product
X to customers at 150 per unit. Y
Segment needs product X, normally,
they purchase it from outsider at
180 per unit. What is the maximum
price that Segment Y will be willing
to pay for the product if it will be
purchased internally?
●
• 80
O • 120
• 180
• 150
O • None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F38825fa7-25d1-4d00-abae-09f1b37e3439%2Fec71d86d-c76e-4291-8230-daad63d07718%2Ffy8qw6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:X Segment has excess capacity. It
produces product X at total product
cost of 100 (includes 20 FC). X
Segment normally sells the product
X to customers at 150 per unit. Y
Segment needs product X, normally,
they purchase it from outsider at
180 per unit. What is the maximum
price that Segment Y will be willing
to pay for the product if it will be
purchased internally?
●
• 80
O • 120
• 180
• 150
O • None of the above
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