Assume the XYZ Corporation Is Producing 20 Units of Output

question 75

Multiple Choice

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation

• A) should close down in the short run.
• B) is maximizing its profits.
• C) is realizing a loss of $60.
• D) is realizing an economic profit of $40.

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Definitions:

Business Model

A conceptual structure that supports the viability of a business and explains how it operates, makes money, and delivers value to stakeholders.

New Venture

The act of embarking on a new business endeavor that typically involves risk and innovation.

Value

The importance, worth, or usefulness of something to a consumer, often reflected in their willingness to pay for a product or service.

Technological Component

Refers to the technical elements or aspects in a system, product, or process, often involving hardware, software, or both.