Suppose That the Cost of Operating a Taxicab Is $25,000/year

question 63

Multiple Choice

Suppose that the cost of operating a taxicab is $25,000/year and that a cab in full-time operation will collect $35,000/year in fares.
-Refer to the information above.If taxi medallions (licences) are issued by the city government and cannot be sold,a taxi owner would earn ________ per year in economic profit.

• A) $0.
• B) $10,000.
• C) $25,000.
• D) $35,000.
• E) $60,000.

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Definitions:

Corporate Opportunity Rule

A legal doctrine preventing directors and officers of a corporation from taking a business opportunity for themselves without offering it to the corporation first.

Derivative Suit

A lawsuit brought by a corporation's shareholder on behalf of the corporation against a third party, often the corporation's executives or directors.

Time of the Injury

The specific moment at which an individual is harmed or damaged, often critical in legal contexts.

Corporate Charter

The legal document that establishes a corporation and outlines its structure, objectives, and the authority to operate, also known as articles of incorporation.