-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:

Units Produced

The number of complete goods or products a company manufactures over a specific period.

On Hand

Refers to the inventory that is physically present and available for sale or use within a business.

Net Operating Income

The profit generated from a company's regular, core business operations, excluding deductions of interest and taxes.

Variable Costing

An accounting method where only variable costs (costs that change with production levels) are included in product costs, excluding fixed costs.