Use the Following to Answer Question

question 11

Multiple Choice

Use the following to answer question:
-(Table: Variable Costs for Lots) Use Table: Variable Costs for Lots.During the winter,Alexa runs a snow-clearing service in a perfectly competitive industry,which is made up of 50 identical firms.Assume that costs are constant in each interval;so,for example,the marginal cost of clearing each of the lots from 1 through 10 is $20.Also assume that she can only plow the quantities of the lots given in the table (and not numbers in between) .Her only fixed cost is $1,000 for a snowplow.Her variable costs include fuel,her time,and hot coffee.Which point falls on the industry short-run supply curve?

• A)P = $40,Q = 60
• B)P = $10,Q = 10,000
• C)P = $25,Q = 2,000
• D)P = $25,Q = 40

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Definitions:

Units Produced

The total number of units of product completed in a given period by a company.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, contributing to covering fixed costs and generating profit.

Average Costs

The total costs (fixed and variable) divided by the total quantity produced, indicating the cost per unit of output on average.

Selling Price

The amount of money charged for a product or service, or the sum of the value that customers exchange for the benefits of having or using the product or service.