Jane Wins $100,000 in the Lottery and Immediately Uses Her

question 74

Multiple Choice

Jane wins $100,000 in the lottery and immediately uses her winnings to open up a donut shop.Her direct costs are $50,000,and she puts the remaining money in a savings account earning 10 percent annual interest.Alternatively,Jane could have placed all her lottery winnings in the 10 percent savings account.Jane's total cost is:

• A)$60,000.
• B)$50,000.
• C)$160,000.
• D)$45,000.
• E)$55,000.

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Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to changes.

Expand

To increase in size, number, or scope, such as a business growing its operations or a market increasing its reach.

Internal Economies

Cost-saving measures that arise from the expansion of a firm, affecting the production process internally.

External Economies

Benefits that a firm obtains due to the actions of others or external factors, leading to reduced costs.