Refer to Scenario 9

question 168

Multiple Choice

Refer to Scenario 9.4 below to answer the question(s) that follow.
SCENARIO 9.4: Sponsors invest $100,000 in a new deli on the promise that they will earn a return of 10% per year on their investment. The deli sells 52,000 sandwiches per year. The deli's fixed costs include the return to investors and $42,000 in other fixed costs. Variable costs consist of wages ($1,000 per week) plus materials, electricity, etc. ($2,000 per week) . The deli is open 52 weeks per year.
-Refer to Scenario 9.4. The annual total costs of the deli are

• A) $42,000.
• B) $52,000.
• C) $156,000.
• D) $208,000.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.

Profit-Maximizing

The practice or strategy of adjusting production and prices to achieve the highest possible profit.

Input Hiring

The process of acquiring resources or services needed for production, including labor, materials, and machinery.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production, holding other factors constant.