-The Table Above Shows Output and Costs of Evan's Subs

question 31

Multiple Choice

-The table above shows output and costs of Evan's Subs, a typical perfectly competitive firm in a local market for sandwiches. Evan's fixed cost is $9 per hour. The current market price of a sandwich is $6. If Evan's sells the 5th sandwich, the marginal cost is ________ the marginal revenue, so the firm's profit ________.

• A) greater than; decreases
• B) greater than; increases
• C) less than; increases
• D) less than; decreases

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Definitions:

Raw Materials Inventory

The total cost of all the components and materials stored that are to be used in the production of goods.

Indirect Product Cost

Costs associated with production that are not directly attributable to the product, such as maintenance and utilities.

Advertising Campaign

A series of advertisement messages that share a single idea and theme which make up an integrated marketing communication.

Chocolate Factory

A manufacturing establishment dedicated to the production of chocolate products from raw cacao beans or pre-made cocoa mass.