The Plastic Toy Company sells fashion figures. The normal selling price is $ 1 9 per unit
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Question:
The Plastic Toy Company sells fashion figures. The normal selling price is $ per unit and costs are as follows:
Variable production costs: $ per unit
Variable marketing costs: $ per unit
Factory rent fixed: $
Administrative costs fixed: $
The firm currently produces and sells units. The factory it rents has the capacity to produce up to units.
Suppose the offer is to purchase additional units at a price of $ per unit.
Do you think the firm should accept the offer? Why or why not?
If the firm wants to maintain its current profit, what is the minimum price it can accept for the offer?
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