Suppose Darlene Purchased a Computer 2 Weeks Ago for $2,000

question 115

Multiple Choice

Suppose Darlene purchased a computer 2 weeks ago for $2,000.Today she can purchase a new computer that is twice as fast for $1,400.She also discovers that her current computer sells used for $300.The sunk cost of her current computer is

• A) $0.
• B) $300.
• C) $1,100.
• D) $1,700.
• E) $2,000.

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit which leads to firms earning normal profits in the long run.

Monopolist

A single seller in a market, who has significant control over the price and supply of a product.

Price Per Unit

The cost assigned to a single unit of a good or service.

Marginal Revenue

The profit derived from the sale of an additional item of a product or service.