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The ERT Company sells lead pencils in a perfectly competitive market for $5 per box of a dozen pencils. The firm currently produces 2,500 boxes of lead pencils each week and average total cost at this level of production is $5.15. What level of profit is this firm earning? Explain.
Substantial Expense
A significant outlay of money, often categorized as higher than usual costs, that can impact financial positions or budgets.
Consideration
A value promised in exchange for a certain act in a contractual agreement.
Quantum Meruit
A legal principle where a party is compensated with a reasonable sum for goods or services provided, even if no contract exists.
Quantum Valebant
A principle in contract law that allows for the recovery of as much as deserved, or the reasonable value of goods or services rendered when no contract price was established.
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