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

question 31

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. If Evan's sells the 5th sandwich, the marginal cost is ________ the marginal revenue, so the firm's profit ________.

• A) greater than; decreases
• B) greater than; increases
• C) less than; increases
• D) less than; decreases

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Definitions:

Legally Insolvent

The condition of being unable to pay debts as they fall due or having liabilities that exceed the value of assets.

Fiduciary Duty

A legal obligation to act in the best interest of another party, usually in a financial context.

Operation of Law

Changes in rights or obligations that occur automatically due to established legal rules, without the need for action or agreement by individuals.

Goodwill Compensation

Financial compensation for intangible assets such as brand reputation, customer loyalty, and other non-physical assets that contribute to a business's value.