Suppose You Have Just Opened a Store to Sell Espresso

question 157

Multiple Choice

Suppose you have just opened a store to sell espresso machines.Both you and a competing store buy this machine from a manufacturer for $130 each.Your competitor who has a store of the same size as yours is currently selling about 10 machines a month at a price of $200 per machine.You expect to sell about 6 machines a month at a price of $220 per machine.If you lower your price, you expect to make a loss.Which of the following could explain why your competitor is able to profitably sell the machine at a lower price although the cost of purchasing the machine is the same for the both of you?

• A)The competing store probably has a lower marginal cost of production.
• B)The competing store probably has a lower average variable cost of production.
• C)The competing store's goal is to maximize revenue and not profit.
• D)The competing store probably has a lower average cost because average fixed cost falls as output increases.

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Definitions:

Transgendered

Transgender is the correct term, and it describes individuals whose gender identity does not align with the sex they were assigned at birth.

Chromosomal Defects

Chromosomal Defects are abnormalities in the number or structure of chromosomes, leading to genetic disorders or physical malformations.

Androgens

A group of hormones that play a role in male traits and reproductive activity; present in both males and females but in higher levels in males.

Gender Identity

The personal sense of one's own gender, which may or may not align with the sex assigned at birth.