Suppose You Are the Owner of a Picture Frame Store

question 125

Multiple Choice

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting) . If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?

• A) a loss of $32,000
• B) $0
• C) $32,000 profit
• D) $112,000 profit
• E) $128,000 profit

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Definitions:

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A species of bird known for the males’ construction of elaborate structures, or bowers, decorated with blue objects to attract females as part of their mating ritual.

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A group of bird species known for their mating behaviors, including the male's long tail feathers used to attract females.

Long-Tailed Sons

A hypothetical or specific trait in certain species where male offspring have an extended tail feature, potentially influencing mating success or survivability.

Mate Choice

The process by which an individual selects a partner based on certain traits or behaviors that are indicative of high genetic quality or compatibility.