Suits Only,a Dry-Cleaning Firm That Specializes in Cleaning Business Suits,operates

question 75

Multiple Choice

Suits Only,a dry-cleaning firm that specializes in cleaning business suits,operates in a perfectly competitive market.Robin Smith,an exceptionally talented manager,has been hired to manage Suits Only.In the dry-cleaning business,a manager typically makes a salary of $400 per week.Suits Only faces the long-run average and marginal costs shown in the figure below.In long-run competitive equilibrium,the market price for cleaning a business suit is $4.50. Given the above,Robin Smith is probably going to negotiate a salary of $______ per week,$______ of which is economic rent.

• A)$400,$0
• B)$475,$75
• C)$500,$100
• D)$500,$500

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Definitions:

Homestead Strike

An 1892 labor strike against the Carnegie Steel Company, notable for its violence and the use of strikebreakers and private security to suppress workers.

Pullman Strike

A nationwide railroad strike in the United States in 1894 that significantly affected rail traffic and led to federal intervention.

Efficiency

The ability to achieve maximum productivity with minimum wasted effort or expense, often utilized in economic and operational contexts.

Working Conditions

The environment and terms under which employees work, including hours, safety, physical demands, and legal rights.