Weightless Inc. produces a small and large version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows: Bath Scale Gym Scale East Region unit sales 21,000 36,100 West Region unit sales 22,700 23,800 Total 43,700 59,900 The finished goods inventory estimated for October 1 for the Bath and Gym scale models is 1,600 and 2,000 units, respectively. The desired finished goods inventory for October 31 for the Bath and Gym scale models is 1,200 and 2,200 units, respectively. Prepare a production budget for the Bath and Gym scales for the month ended October 31.

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale