Scenario 13-16 A Certain Firm Produces and Sells Staplers. Last Year, It

question 167

Multiple Choice

Scenario 13-16
A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-16.Suppose the owner of the business had an offer to work for another firm for $25,000.The firm's economic profit for the year was

• A) $-28,000.
• B) $-25,000
• C) $-3,000.
• D) $17,000.

Identify the conditions under which a principal is liable for the actions of their agent.

Describe the different ways an agency relationship can arise.

Recognize the effects of nondisclosure of agency on contractual obligations and liabilities.

Understand how agency relationships affect third-party contracts.

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Definitions:

Monopolist

A monopolist refers to a single supplier in a market who has significant control over the market price of a product or service due to the lack of competition.

Marginal Revenue

The incremental revenue obtained from the sale of an additional unit of a product or service.

Natural Monopoly

A market situation where a single firm can supply a product or service at a lower cost than any potential competitor, often due to economies of scale.

Substitutes

Alternative goods or services that can satisfy the same needs as another, often leading to a choice between the two based on price, convenience, or preference.