Consider the Following Total Cost Schedule for a Perfectly Competitive

question 75

Multiple Choice

Consider the following total cost schedule for a perfectly competitive firm producing ball- point pens. $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Output } \\\text { per period }\end{array} & \text { TVC } ( \$ ) & \text { TFC } ( \$ ) \\\hline 0 & 0 & 5 \\\hline 10 & 2 & 5 \\\hline 20 & 3 & 5 \\\hline 30 & 6 & 5 \\\hline 40 & 10 & 5 \\\hline 50 & 15 & 5 \\\hline\end{array}\\\text { TABLE 9- } 3\end{array}$$
-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) $6; $120
• B) $0.40; $8
• C) $9; $180
• D) $0.01; $2
• E) $0.05; $1.00

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Definitions:

Objective Impossibility

This term describes a situation where the fulfillment of a contract's obligations cannot be carried out by anyone due to external circumstances, such as the destruction of something necessary for performance.

Subjective Impossibility

A situation where completing a contract's obligation is impossible due to circumstances personal to the obligated party.

Performance

in the context of contracts, refers to the execution of duties or the fulfillment of obligations specified in the contract.

Substantial Performance

A legal concept indicating that a party has completed the major obligations of a contract, even if minor details were not completed, often entitling that party to payment.