Two Firms, a and B, Both Produce Widgets

question 41

Multiple Choice

Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of 50¢ per widget. Firm B has total fixed costs of $240,000 and variable costs of 75¢ per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1,200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000 widgets. If the economy enters a recession, the after-tax profit of Firm B will be

• A) $0.
• B) $6,000.
• C) $36,000.
• D) $60,000.
• E) None of the options are correct.

Analyze the benefits of specialization and trade for countries with different production possibilities.

Identify misconceptions related to international trade and its impacts on exporting and importing countries.

Understand the concept of brain plasticity and its peak period.

Comprehend the functions and interactions of the brain's hemispheres.

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Definitions:

Supply Chain Sustainability

Practices and strategies in supply chains that promote environmental, economic, and social well-being over the long term.

Aggressive Targets

Goals set to achieve a significantly challenging objective, often requiring intense effort and resources.

Landfill Additives

are materials added to landfills to enhance decomposition, manage odors, or improve the breakdown of waste materials.

Sustainability Damage

Negative impacts to the environment, society, or economy due to unsustainable practices or decisions.