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

question 192

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 will Arnie's output be and how much profit will he earn if the market price of basketballs is $5.00?

• A)Q = 1; profit = -$10.
• B)Q = 3; profit = -$7.50
• C)Q = 0; profit = -$10.00
• D)Price and profit cannot be determined from the information given.

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Definitions:

Current Rate Method

A technique for converting foreign currency in which all items on the financial statements are translated using the prevailing exchange rate.

Inventory Balance

The total value of all the goods and materials held by a company for resale or production purposes at the end of an accounting period.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reflecting its loss of value over time.

Translated Income Statement

An income statement that has been converted from one currency to another, typically involved in the financial reporting of multinational companies.