Refer to the Figure Below

question 47

Multiple Choice

Refer to the figure below. If the market for doughnuts is perfectly competitive, and the price of a doughnut is 25 cents, then at this firm's profit maximizing level of output, the firm will earn an economic ______ of ______ per day. rev: 08_28_2015_QC_CS-20888

• A)profit; $80
• B)profit; $8
• C)loss; $10
• D)loss; $80

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Definitions:

January 20 Call

An options contract giving the holder the right to buy a specific asset at a predetermined price on or before January 20th.

T-Bill Rate

The yield or interest rate paid to investors in U.S. Treasury bills, which are short-term government securities.

Call Option

A financial agreement allowing the purchaser the option, rather than the requirement, to purchase a given stock, bond, commodity, or different asset at an agreed-upon price within a certain timeframe.

Value Increase

Refers to the rise in worth or price of assets, investments, or goods over time.