Two Firms, C and D, Both Produce Coat Hangers

question 64

Multiple Choice

Two firms, C and D, both produce coat hangers.The price of coat hangers is $1.20 each.Firm C has total fixed costs of $750,000 and variable costs of 30' per coat hanger.Firm D has total fixed costs of $400,000 and variable costs of 50' per coat hanger.The corporate tax rate is 40%.If the economy is strong, each firm will sell 2,000,000 coat hangers.If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy enters a recession, the before-tax profit of firm C will be

• A)$1,680,000.
• B)$1,170,000.
• C)$510,000.
• D)$204,000.

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Definitions:

Underlying Infection

A hidden infection that is present but may not be the immediate cause of symptoms, often complicating or causing other medical conditions.

Staphylococcus Aureus

A type of bacteria that can cause skin infections, pneumonia, and other conditions.

Bacterial Infection

An infection caused by harmful bacteria entering and multiplying in the body.

Bubonic Plague

An infectious disease caused by the bacterium Yersinia pestis, characterized by swollen lymph nodes, fever, and skin sores. Historically known as "Black Death."