Silky Inc, Which Sells Custom Silk Ties Designed by Famous People

question 4

Multiple Choice

Silky Inc., which sells custom silk ties designed by famous people, faces a demand curve of Q = 150 - 0.2P, where Q is measured in hundreds of ties and P is the price per tie. The marginal cost of production is given by MC = 5Q. What is Silky's profit-maximizing output level? (Hint: Add two zeros to the number you get.)

• A) 25,000
• B) 5,000
• C) 450
• D) 6,000

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Definitions:

Liabilities

Financial obligations owed by a business to others, such as loans, accounts payable, and mortgages, which must be paid in the future.

Debts

Money that is owed or due to another individual or entity.

Assets

Assets are resources owned by a business or individual that have economic value and can bring about future benefits, such as cash, real estate, and machinery.

Liabilities

Financial obligations or debts of a business that arise during the course of its operations, required to be settled over time.