Figure 2.4 -Joe Runs a Business and Needs to Decide How Many

question 117

Multiple Choice

Figure 2.4
-Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 5 hours per day.If he is following the marginal principle,what must his marginal cost be?

• A) $16
• B) $24
• C) $32
• D) $40

Apply discounts and terms correctly to determine final payments.

Calculate net price after trade discounts.

Determine selling price to achieve desired profit margins.

Understand and calculate overhead expenses in pricing.

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Definitions:

ATC

Average total cost, which is the total cost of production divided by the number of goods produced, indicating the average cost per unit.

Profit-maximizing

The process of identifying the output level at which a business can achieve the highest possible profit.

Cost Data

Information related to the expenses incurred in the production, operation, or provision of services, used for analysis and decision-making purposes.

Demand Data

Information on the quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.