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

question 334

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 is Evan's maximum short-run economic profit?

• A) $6 per hour
• B) $1 per hour
• C) -$6 per hour
• D) zero

---

Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in other cases, the central bank's interest rate for banks.

Net Present Value

The contrast between the present-valued cash inflows and outflows over a determined period.

Working Capital

The gap between a business's current assets versus its current liabilities, reflecting its short-term solvency and efficiency in operations.

Investment Project

An endeavor in which resources are invested with the goal of generating future returns, typically involving financial, time, or other forms of resources.