A Home with a Cost Basis of $40,800 in 2005

question 6

Multiple Choice

A home with a cost basis of $40,800 in 2005 is resold today for $90,000. Commissions and closing expenses are $6,300. What is the gain on the sale?

• A) $6,300
• B) $42,900
• C) $83,700
• D) $82,600

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Definitions:

Profit-Maximizing

The strategy used by a business to find the optimal price and quantity of production for maximum profit.

Demand Schedule

A table that shows the quantity of goods or services that consumers are willing and able to purchase at various prices.

Nonprice Competition

A strategy used by businesses to attract customers through methods other than price, like quality, service, and brand reputation.

Product Promotion

Activities undertaken to inform potential customers about a product or service, encouraging its purchase.