-The Figure Above Shows a Perfectly Competitive Firm

question 62

Multiple Choice

-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces ________ units and makes an economic profit that is ________.

• A) more than 45; more than $400
• B) 40; more than $400
• C) 40; less than $400
• D) 30; equal to zero
• E) 30; more than $250

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Definitions:

Allocation Base

A criterion or measure used for distributing overhead costs among various cost objects, such as departments or products.

Fixed

Expenses that do not change in total over a short period, regardless of the level of production or sales activity, such as rent, salaries, or insurance.

Classified

Pertains to information, documents, or materials that have been deemed confidential and are restricted to certain levels of access.

Merchandising Company

A type of business that purchases finished goods and sells them to consumers without changing their form.