Exhibit 5-1
the Following Questions Are Based on the Below

question 39

Multiple Choice

Exhibit 5-1
The following questions are based on the below cafeteria flowchart and the information provided in the table. Customers start at counter A and move to Counter B. Customers then choose one of two counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and then move on toward Counter E.

$$\begin{array}{c}\begin{array} { c c c } &\text { INFORMATION TABLE }\\\text { Counter(s) } & \text { Activity Time } & \text { Wage per Person per Hour } \\\text { A } & 10 \text { secs. } & \$ 6 \\\text { B } & 30 \text { secs. } & 7 \\\text { C } & 60 \text { secs. } & 7 \\\text { D } & 40 \text { secs. } & 7 \\\text { E } & 30 \text { secs. } & 7 \\\text { F } & 20 \text { secs. } & 8\end{array}\end{array}$$
-Refer to Exhibit 5-1.Where is the bottleneck located in this example?

• A)Counter A
• B)Counter B
• C)Counter C
• D)Counter D
• E)Counter E

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Definitions:

Produce

To create or manufacture goods and services for consumer use, often involving a combination of raw materials, labor, and machinery.

Leave the Industry

The process by which firms exit a market or cease operations, often due to unfavorable market conditions or insufficient profits.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

Shutdown Point

The level of output and price at which a firm's total revenue just covers its variable costs; below this point, the firm would cease production.