Use the Table Below to Answer the Following Question

question 5

Multiple Choice

Use the table below to answer the following question.
Table 11.2.4

-Refer to Table 11.2.4.The market is perfectly competitive and there are 1,000 firms that produce paper. The top table sets out the market demand schedule for paper.
Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size.
The market price is ________ a box and the market output is ________ boxes.The output produced by each firm is ________ boxes.Each firm ________.

• A)$7.00;250,000;250;incurs an economic loss of $1,000 a week
• B)$8.40;350,000;350;makes zero economic profit
• C)$7.65;300,000;300;incurs an economic loss of $834 a week
• D)$8.40;350,000;350;incurs an economic loss of $581 a week
• E)$7.65;350,000;300;makes zero economic profit

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Definitions:

Raw Material

Basic substances in their natural, modified, or semi-processed state used as inputs to a production process for manufacturing goods.

Beginning Inventory

The value of all inventory held by a company at the start of an accounting period, which includes raw materials, work-in-progress, and finished goods.

Merchandise Purchases

The acquisition of goods that a company intends to sell in its normal course of business; this includes goods bought for resale.

Cost Of Goods

The total direct costs attributable to the production of the goods sold by a company.