Refer to Scenario 9.1 below to answer the question(s) that follow. SCENARIO 9.1: Amy borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen. Refer to Scenario 9.1. Amy's profit is
A. $0.
B. $20,000.
C. $30,000.
D. $50,000.
Answer: B
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Indicate whether the statement is true or false
In an industry where firms experience internal scale economies, the long-run cost of production will depend on
A) the size of the market. B) the size of the labor force. C) whether the country engages in intra-industry trade. D) individual firms' fixed costs. E) whether the country engages in inter-industry trade.
Which of the following provides the strongest evidence that a firm operating in the highly competitive retail sector is supplying goods and services that consumers value highly relative to their cost?
a. The top-level managers of the firm are paid high salaries. b. The firm is on the verge of bankruptcy. c. The firm is a large corporation. d. The firm is highly profitable, and its sales have grown rapidly.
A rise in the price of foreign inputs leads to a
A) rightward shift of the AD curve. B) leftward shift of the AD curve. C) rightward shift of the SRAS curve. D) leftward shift of the SRAS curve.