Consider the Following Total Cost Schedule for a Perfectly Competitive

question 128

Multiple Choice

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
TABLE 9-3
-Refer to Table 9-3.Suppose the prevailing market price for this firm's product is $0.45.If the firm is producing 20 units of output per period,then its profit per unit is ________ and its total profit per period is ________.

• A)$9; $180
• B)$0.05; $1.00
• C)$6; $120
• D)$0.01; $2
• E)$0.40; $8

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Definitions:

GIC

Guaranteed Investment Certificate; a Canadian investment that offers a guaranteed rate of return over a fixed period.

Maturity Value

The amount payable to an investor at the end of a fixed term investment, including principal and interest.

Monthly Compounded

A reiteration indicating that the interest accrues on a monthly basis, thereby increasing the investment or loan amount through compounding.

Promissory Note

A written and signed promise to pay a specified sum of money to a particular person or bearer on a specified date.