Everclean Company Cleans Draperies

question 2

Multiple Choice

Everclean Company cleans draperies. It charges $90 to clean a full-size drape, and its variable and fixed costs are $55 per drape and $10,000 per year, respectively. Given these data, if Everclean's fixed costs increased to $15,000, how many drapes must the firm clean to earn $60,000?

• A) 429
• B) 1,364
• C) 2,000
• D) 2,143

Recognize the relationship between efficiency and equity, including the trade-offs involved.

Identify how prices serve as economic signals in markets.

Understand the concept of total surplus and its components: consumer surplus and producer surplus.

Recognize the role of property rights in market efficiency.

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Definitions:

Facial Expressions

Visible changes in the face that communicate emotional states or reactions to others.

Two-Factor Theory

A psychological theory proposing that emotional experiences arise from a combination of a state of physiological arousal and a cognitive interpretation of the situation.

Four-factor Model

A framework in financial economics used to describe the returns of a portfolio or asset in relation to four factors, including market risk and three other factors that influence returns.

Emotion Labeling

The process of identifying and naming one's emotional states.