Homer's Holesome Donuts Has Determined That Its Profit-Maximizing Quantity Is

question 68

Multiple Choice

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year.Homer's total revenue from the sale of donuts is $12,000 a year.Homer's costs are $16,000 in annual rental payments for its five-year lease on its store and $5,000 for ingredients.Should Homer's exit the market in the long run?

• A)Yes,because Homer's is incurring an economic loss.
• B)Yes,because all costs are fixed in the long run.
• C)No,because Homer's is covering its variable costs.
• D)No,because Homer's is covering its fixed costs.
• E)No,because all costs are variable in the long run.

---

Definitions:

Body Count

The total number of killed, wounded, or missing individuals in a particular event, often used in the context of military conflicts or disasters.

Opponents

Opponents are individuals or groups that compete against or hold differing views from another in a conflict, competition, or debate.

Defoliants

Chemicals used to remove the leaves from trees and plants, often used in agriculture to control weeds, and militarily to increase visibility in combat zones, such as in the Vietnam War.

1,000,000 Pounds

A monetary value in British currency, often used to denote a significant sum of money.