Decent Donuts -Use the Data in the Table Above and Suppose That

question 289

Multiple Choice

Decent Donuts

-Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve

• A) has a positive slope.
• B) shows the effect of increasing marginal returns.
• C) Both answers A and B are correct.
• D) Neither answer A nor B is correct.

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Definitions:

Explicit Costs

are direct, out-of-pocket payments for expenses incurred by a business or individual.

Revenues

The total income generated by a company or organization from its activities, before any expenses are subtracted.

Economic Profit

The difference between the total revenues received by a business and the total opportunity costs of all resources used in the production.

Accounting Profit

The net income of a business as calculated by subtracting total expenses from total revenues, according to standard accounting practices.