Homer's Holesome Donuts Has Determined That Its Profit-Maximizing Quantity Is

question 68

Multiple Choice

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year.Homer's total revenue from the sale of donuts is $12,000 a year.Homer's costs are $16,000 in annual rental payments for its five-year lease on its store and $5,000 for ingredients.Should Homer's exit the market in the long run?

• A)Yes,because Homer's is incurring an economic loss.
• B)Yes,because all costs are fixed in the long run.
• C)No,because Homer's is covering its variable costs.
• D)No,because Homer's is covering its fixed costs.
• E)No,because all costs are variable in the long run.

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Definitions:

Conflict Theory

Examines how groups disagree, struggle for power, and compete for scarce resources such as wealth and power.

Structural-functionalism

A theoretical framework in sociology that sees society as a complex system whose parts work together to promote solidarity and stability.

Exchange Theory

A social psychological perspective that posits social behavior is the result of an exchange process to maximize benefits and minimize costs.

Symbolic Interactionism

A sociological perspective emphasizing how individuals interpret and act upon social symbols, thus creating shared meanings within human interactions.