Table 12-3 Arnie Sells Basketballs in a Perfectly Competitive Market. Table 12-3

question 79

Multiple Choice

Table 12-3

Arnie sells basketballs in a perfectly competitive market. Table 12-3 summarizes Arnie's output per day (Q) , total cost (TC) , average total cost (ATC) and marginal cost (MC) .
-Refer to Table 12-3.What price (P) will Arnie charge and how much profit will he earn if the market price of basketballs is $12.50?

• A)Price and profit cannot be determined from the information given.
• B)P = $12.50; profit = $52.50
• C)P = $12.50; profit = $22.50
• D)P = $20; profit = $75.00.

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Definitions:

Vertical Merger

Occurs when a company acquires another firm that is “upstream” or “downstream”; for example, an automobile manufacturer acquires a steel producer.

Petrochemical Firm

A company involved in the production of chemical products derived from petroleum and natural gas.

Oil Reserves

Quantified estimates of the amount of crude oil located in a specific economic region that can be recovered and sold under current economic and technological conditions.

Hostile Takeovers

Attempts by a company to acquire another company against the wishes of the target company's management and board of directors.