The neighborhood ice cream shop finds that when it charges $3 per ice cream cone, its total revenues are $90,000. It has total variable costs of $30,000 and total fixed costs of $40,000. From this we can infer the:
A. shop sells 10,000 ice cream cones.
B. price is less than average total cost.
C. economic profits are $20,000.
D. shop will be closed in the long run.
Answer: C
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Refer to the scenario above. Which of the following is true?
A) Both the workers should specialize in the production of Good Y. B) Worker 1 should produce Good Y and Worker should produce Good X. C) Worker 1 should produce Good X and Worker should produce Good Y. D) Both the workers should specialize in the production of Good X.
A combination of recession and inflation is called
A) a recession. B) an expansion. C) a business cycle. D) stagflation. E) depression.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would increase, quantity demanded would increase, and quantity supplied would decrease. C) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. D) The price would increase, the demand would increase, and the supply would decrease.
Suppose the observed annual quantity of steel exchanged in the European market is 30 million metric tons, and the observed market price is 90 euros per ton
If the price elasticity of demand for steel is -0.3 in Europe, what is an appropriate value for the price coefficient (b) in a linear demand function Q = a - bP? A) b = 0.9 B) b = -0.9 C) b = 0.1 D) b = -0.1