A Small Business Has Weekly Average Costs (In Dollars) of

question 99

Multiple Choice

A small business has weekly average costs (in dollars) of , where is the number of units produced each week. The competitive market price for this business's product is $41 per unit. If production is limited to 277 units per week, find the level of production that yields maximum profit.

• A)88 units
• B)277 units
• C)140 units
• D)110 units
• E)125 units

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price in a market.

Car Market

The industry related to the manufacturing, selling, and buying of automobiles.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is distributed to yield the highest aggregate utility.

Willingness To Pay

The maximum amount a consumer is prepared to spend to acquire a good or service.