Suppose a Firm Has Net Income of $100 and a Profit

question 351

Multiple Choice

Suppose a firm has net income of $100 and a profit margin equal to 14%. If the firm is working at 2/3 capacity, then full capacity sales are:

• A) $476
• B) $539
• C) $714
• D) $823
• E) $1,071

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Definitions:

Supply

The sum of a good or service that is offered for sale at a particular price point within a specific market.

Consumers' Incomes

The total amount of money received by individuals or households, influencing their purchasing power and consumption patterns.

Computer Chips

Small electronic components made of semiconductor material, used to perform computing tasks and store data in various electronic devices.

Supply Curve

A graph showing the relationship between the price of a good and the quantity supplied, typically illustrating that as the price increases, the quantity supplied increases.