The Firm in the Figure Above Is ________ That Is

question 84

Multiple Choice

The firm in the figure above is ________ that is equal to ________.

• A) making an economic profit; $5.14 × 7
• B) making an economic profit; $3.00 × 7
• C) incurring an economic loss; $5.14 × 7
• D) incurring an economic loss; ($5.14 - $3.00) × 7
• E) making an economic profit; ($5.14 - $3.00) × 7

---

Definitions:

Labor Hours

A measure of the amount of work or effort in terms of hours spent by workers in producing goods or providing services.

Profitable Use

The utilization of resources or assets in a way that generates a financial gain.

Fixed Manufacturing Overhead

Costs in manufacturing that do not vary with the level of production, such as salaries of supervisors and rent of the factory.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted; it contributes towards covering fixed costs and generating profit.