Table 17-6 Imagine a Small Town in Which Only Two Residents, Kunal

question 151

Multiple Choice

Table 17-6
Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero.
The weekly town demand schedule and total revenue schedule for water are shown in the table below.
-Refer to Table 17-6. As long as Kunal and Naj operate as a profit-maximizing monopoly, what will their combined weekly revenue amount to?

• A)$450
• B)$675
• C)$875
• D)$900

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Definitions:

Receivables Turnover

A financial metric indicating how quickly a company collects on outstanding accounts receivable in a given period, calculated as net credit sales divided by average accounts receivable.

Debt Ratio

A financial ratio that compares the amount of a company's debt to its total assets, indicating the proportion of a company's assets that are financed through debt.

Cash Flow from Operations

The amount of cash a company generates through its regular business operations over a specific period.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.