Refer to the Following:
a Consulting Company Estimated Market Demand $$\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M$$

question 81

Multiple Choice

Refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
$$\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M$$
$$Q _ { 5 } = 240,000 + 5,000 P - 2,000 P _ { I }$$
where P is price, M is income, and
$P _ { I }$ is the price of a key input. The forecasts for the next year are
$\hat { M }$ = $15,000 and
$\hat { P } _ { I }$ = $20. Average variable cost is estimated to be
$A V C = 14 - 0.008 Q + 0.000002 Q ^ { 2 }$
Total fixed cost will be $6,000 next year.
-Suppose that income for next year is forecasted to be $9,000 instead. What will the firm's profit (loss) be?

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Definitions:

Capital Interest

Capital Interest refers to the interest on investment that is considered part of the cost of a fixed asset or is capitalized.

Bonus

A bonus refers to a financial compensation that is above and beyond the normal payment expectations of its recipient.

Total Capital

The sum of a company's debt and equity, indicating the total funds available for business operations and investment.

Legal Dissolution

The process of legally ending the existence of a business entity, with procedures varying depending on business structure and jurisdiction.