The Wax Works sells 400 candles at a price of $6 per candle. The Wax Works' total costs for producing 400 candles are $2,500. The Wax Works' economic profit is
A. -$100.
B. $0.
C. $2,400.
D. $2,500.
Answer: A
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The internet has changed how people shop for clothes, electronics, and other goods. Because of online shopping, many retailers have closed or shut down. How has this affected goods like clothes?
A. The supply of goods like clothes will decrease. B. The demand for goods like clothes will increase. C. The supply of goods like clothes will increase. D. The demand for goods like clothes will decrease.
Use the above figure. Suppose that a regulatory agency requires this natural monopolist to engage in marginal cost pricing. This would lead to
A) losses, which would drive the monopolist out of business in the long run. B) profits, which would encourage new producers to enter the industry in the long run. C) profits, but new firms cannot enter the industry in the long run due to high barriers to entry. D) losses, which would encourage the monopolist to lower costs in the long run.
Compare and contrast the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. What elements do they have in common? What elements differ between them?
What will be an ideal response?
Suppose we know that 10 Spanish Galleons sunk in the Atlantic Ocean carrying approximately 50 tons of gold, but the exact location of these shipwrecks is unknown. Would this gold add to the world reserve?
A) Yes, we know it exists. B) No, we know it exists but we can't extract the gold. C) Yes, it's only a matter of time before the shipwrecks are discovered. D) No, there are no established property rights over the shipwreck so they cannot add to world reserves.