Consider the Following Information About a Business Diane Opened Last

question 171

Multiple Choice

Consider the following information about a business Diane opened last year: price = $20, quantity sold = 25,000; implicit cost = $255,000; explicit cost = $360,000. Assuming that all relevant costs and revenue are noted, what was Diane's economic profit?

• A)$140,000
• B)-$115,000
• C)-$140,000
• D)$220,000
• E)$245,000

---

Definitions:

Profit-Maximizing Firms

Companies that operate with the goal of making the highest possible profit from their activities.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Downward-Sloping Demand

A concept in economics that illustrates how demand for a good or service decreases as the price increases, assuming all other factors remain constant.

Monopoly

A monopoly is a market structure characterized by a single seller dominating the market, facing no competition, which can influence prices and control the supply of goods or services.