Consider the Price and Quantity Data Below for a Perfectly

question 21

Multiple Choice

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. $$\begin{array}{l}\begin{array} { | l | l | } \hline \text { Price } ( \$ ) & \text { Quantity } \\\hline 5 & 1000 \\\hline 5 & 1250 \\\hline 5 & 1500 \\\hline 5 & 1750 \\\hline 5 & 2000 \\\hline\end{array}\\\text { TABLE 9- } 1\end{array}$$
-Refer to Table 9- 1. Suppose this firm is producing 1500 mousetraps and its average total cost is
$5.10 per unit. The firm will be

• A) suffering losses of $7650.
• B) suffering losses of $150.
• C) breaking even.
• D) earning profits of $150.
• E) earning profits of $7650.

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Definitions:

Expected Return

The weighted average of all possible returns for a financial investment, with each return's weight being its probability of occurrence.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.

U.S. Treasury Bills

Short-term government securities issued by the United States Department of the Treasury with maturity periods typically up to one year.

Utility Function

A mathematical representation that shows the relationship between a consumer's level of satisfaction and quantities of consumed goods or services.