Table 16-6 Traci's Hairstyling Is One Salon Among Many in the Market

question 473

Multiple Choice

Table 16-6
Traci's Hairstyling is one salon among many in the market for hairstyling. The following table presents cost and revenue data for haircuts at Traci's Hairstyling.

-Refer to Table 16-6.What is the profit-maximizing output for Traci's Hairstyling?

• A) 3 haircuts
• B) 4 haircuts
• C) 5 haircuts
• D) 6 haircuts

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Definitions:

Hedge Relationship

A connection between a hedging instrument and the risk it is intended to offset, ensuring that changes in the value of one are counterbalanced by changes in the other.

Exchange Gain

A profit resulting from holding or transacting in foreign currencies as exchange rates vary.

Spot Rate

The existing selling or buying price of a certain currency for transactions that are completed right away.

Fair-Value Hedge

A hedge that is used to mitigate the risk of changes in the fair value of an asset, liability, or an unrecognized firm commitment.