-The Table Above Shows Output and Costs of Evan's Subs

question 243

Multiple Choice

-The table above shows output and costs of Evan's Subs, a typical perfectly competitive firm in a local market for sandwiches. Evan's fixed cost is $9 per hour. The current market price of a sandwich is $6. What quantity of sandwiches produced will maximize Evan's economic profit in the short run?

• A) 2 sandwiches per hour
• B) 3 sandwiches per hour
• C) 4 sandwiches per hour
• D) 5 sandwiches per hour

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Definitions:

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset, like equipment or real estate, over a specified lease term.

CCA Class

Categories used in Canadian tax law to determine the depreciation rate for different types of business assets.

Corporate Tax Rate

The tax rate that companies are charged on their profits by the government.

Break-Even Lease Payment

The lease payment at which the cost of leasing equals the benefits received, with no net loss or gain from entering into the lease.