Raymond Estimates That the Fixed Costs Associated with Opening a New

question 29

Multiple Choice

Raymond estimates that the fixed costs associated with opening a new bank branch are $500 ,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be

• A) $500
• ,000.
• B) $550
• ,000.
• C) $650
• ,000.
• D) $450
• ,000.
• E) $605
• ,000.

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Definitions:

Highly Concentrated Industries

Industries in which a small number of firms control a large market share, often leading to decreased competition and higher barriers to entry for new competitors.

Labor Unions

Labor Unions are organizations formed by workers from related fields that work for the common interest of its members in terms of wages, benefits, and working conditions.

Foreign Purchases Effect

The impact on domestic currency and the balance of trade when residents of a country purchase foreign-made goods and services.

American Exports

Goods and services produced in the United States and sold to other countries, contributing to the country’s GDP and trade balance.