Suppose the Market for Relay Switches Is Considered Perfectly Competitive

question 23

Multiple Choice

Suppose the market for relay switches is considered perfectly competitive and is in equilibrium at a price of $5,000 per pallet of relay switches. Callahan Relay produces relay switches at an average total cost given by ATC = and marginal cost given by MC = 2Q, where Q measures pallets of relay switches. If Callahan Relay maximizes profit, how much profit will it earn?

• A) $125,000
• B) $88,000
• C) $2.5 million
• D) $4.75 million

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Definitions:

Situational Approach

A leadership model suggesting that the most effective leadership style varies according to the situation or context.

Leader Behaviors

Actions and attitudes displayed by leaders that influence their group's performance, morale, and effectiveness.

Expectancy Theory

A motivational theory suggesting that individuals are likely to act in a certain way based on the expectation that the act will be followed by a desired outcome.

Path-goal Leadership

A theory that suggests leaders should adjust their style to fit the developmental and psychological needs of their followers to achieve the desired goal.