Two Firms, a and B, Both Produce Widgets

question 45

Multiple Choice

Two firms, A and B, both produce widgets.The price of widgets is $1 each.Firm A has total fixed costs of $500,000 and variable costs of 50'per widget.Firm B has total fixed costs of $240,000 and variable costs of 75' per widget.The corporate tax rate is 40%.If the economy is strong, each firm will sell 1,200,000 widgets.If the economy enters a recession, each firm will sell 1,100,000 widgets. If the economy is strong, the after-tax profit of Firm B will be

• A)$0.
• B)$6,000.
• C)$36,000.
• D)$60,000.

Understand the significance and effects of the Emancipation Proclamation.

Explore the societal impacts of the Civil War, including aspects like draft riots and the status of black recruits in the Union Army.

Understand the concept and application of naturalistic observation in research.

Recognize the influence of wording effects in survey research.

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Definitions:

Days' Sales in Inventory

A financial metric that estimates how long it takes for a company to turn its inventory into sales.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor costs.

Inventory

The entire stock of materials and products that a company possesses for the aim of production or selling.

Market-to-Book Ratio

A financial ratio that compares a company's market value to its book value, indicating how investors value the company compared to its actual worth.