Suppose That at the Current Level of Output, Pat's Hats

question 71

Multiple Choice

Suppose that at the current level of output, Pat's Hats has fixed costs of $500, variable costs of $1, 000, and $2, 000 in total revenue.Which of the following is true?

• A)Profit is currently $500 and, in the long run, it will be $1, 000 because there will be no fixed costs.
• B)Profit is currently $500 and, in the long run, it will be $1, 500 because there will be no variable costs.
• C)Profit is currently $500.
• D)Profit is currently $500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs.
• E)Pat's Hats will continue to operate as long as revenue is greater than $500.

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Definitions:

Notice

A formal announcement or warning given to someone regarding a particular matter.

Promisor's Death

A situation where the individual who made a promise in a contract passes away, possibly affecting the enforceability of the contract.

Promisee's Will

The intention or decision of the person to whom a promise is made in a contract.

Promisee's Death

In contract law, refers to the situation where the individual to whom a promise was made dies, impacting the enforcement or terms of the contract.