During the Year, Walt Travels from Seattle to Tokyo (Japan) $$\begin{array} { l r } \text { Air fare } & \$ 3,000 \\\text { Lodging } & 2,000 \\\text { Meals and entertainment } & 1,000\end{array}$$

question 72

Multiple Choice

During the year, Walt travels from Seattle to Tokyo (Japan) on business.His time was spent as follows: 2 days travel (one day each way) , 2 days business, and 2 days personal.His expenses for the trip were as follows (meals and lodging reflect only the business portion) : $$\begin{array} { l r } \text { Air fare } & \$ 3,000 \\\text { Lodging } & 2,000 \\\text { Meals and entertainment } & 1,000\end{array}$$ ? Presuming no reimbursement, Walt's deductible expenses are:

• A)$3,500.
• B)$4,500.
• C)$5,500.
• D)$6,000.
• E)None of these.

Understand the significance of price, average total cost, and marginal cost in determining a firm's profitability.

Analyze the graphical representation of profit maximization and loss minimization in a perfectly competitive market.

Understand the characteristics of perfect competition.

Differentiate between short-run and long-run outcomes in perfect competition.

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Definitions:

Increasing Expenses

A situation where the costs of operating a business or undertaking a project are rising.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, illustrating profit or loss.

Profit

The financial gain obtained when the revenues generated from a business activity exceed the expenses, costs, and taxes needed to sustain the activity.

Revenue

The income that a business receives from its normal business activities, usually from the sale of goods and services to customers.