The Table Below Provides the Annual Revenues and Costs for a Family-

question 94

Multiple Choice

The table below provides the annual revenues and costs for a family- owned firm producing catered meals. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { - wages and salaries } & 200000 \\\hline \text { - risk-free return of } 6 \% \text { on owners' capital of } 250000 & 15000 \\\hline \text { rent } & 105000 \\\hline \text { depreciation of capital equipment } & 25000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250000 & 20000 \\\hline \text { - intermediate inputs } & 150000 \\\hline \text { forgone wages of owners in alternative employment } & 80000 \\\hline \text { - interest on bank loan } & 10000 \\\hline\end{array}$ TABLE 7- 1
-Refer to Table 7- 1.The accounting profits for this family- owned firm are

• A)- $15 000.
• B)$10 000.
• C)$30 000.
• D)$0.
• E)$500 000.

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Definitions:

Price Rises

An increase in the cost of goods or services in the market, often due to factors like inflation, increased demand, or higher production costs.

Equilibrium Price

The price at which the quantity demanded of a good equals the quantity supplied.

Quantity Demanded

Represents the total amount of a good or service that consumers are willing and able to purchase at a given price over a specific period of time.

Shortage Occurs

A market condition where the demand for a product exceeds its supply at a given price, leading to a situation where not all consumer demand can be met.