Two Firms, C and D, Both Produce Coat Hangers

question 51

Multiple Choice

Two firms, C and D, both produce coat hangers. The price of coat hangers is $1.20 each. Firm C has total fixed costs of $750,000 and variable costs of 30¢ per coat hanger. Firm D has total fixed costs of $400,000 and variable costs of 50¢ per coat hanger. The corporate tax rate is 40%. If the economy is strong, each firm will sell 2,000,000 coat hangers. If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy is strong, the after-tax profit of firm C will be

• A) $0.
• B) $6,000.
• C) $36,000.
• D) $60,000.
• E) $630,000.

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Definitions:

Justice Orientation

A male mode of moral reasoning proposed by Gilligan that emphasizes the abstract principles of fairness and individualism.

Social Responsibility

The idea that individuals and organizations have an obligation to act for the benefit of society at large, promoting a positive impact on social, environmental, and economic factors.

Civic Behavior

Actions by individuals that are aimed at helping to improve the community and the lives of its members, often through volunteer work or political engagement.

Emotional Regulation

The process by which individuals influence their emotions, how they experience and express them.