Bob’s Burgers Currently Produces and Sells 4000 Burgers Per Month $\begin{array}{ll}\text { Variable costs } & \$ .50 \text { per unit } \\\text { Fixed costs } & \$ 2000\end{array}$

question 48

Multiple Choice

Bob’s Burgers currently produces and sells 4000 burgers per month with the following costs:
$\begin{array}{ll}\text { Variable costs } & \$ .50 \text { per unit } \\\text { Fixed costs } & \$ 2000\end{array}$
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month.
-Bixby Inc.expects total costs to be $2500 when 80 units are sold and the variable cost is $10 per unit.Bixby expects to sell 90 units in July.What will be expected total costs in July?

• A) $3400.00
• B) $2600.00
• C) $2812.50
• D) $4200.00

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Definitions:

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium outcome is not achievable or not achieved.

University

An institution of higher education and research which awards academic degrees in various academic disciplines and provides both undergraduate education and postgraduate education.

Tax

Compulsory payments made to the government, imposed on earnings from employment and profits from businesses, or included in the price of certain goods, services, and dealings.

Arthur Laffer

An economist known for the Laffer Curve, which postulates a relationship between tax rates and tax revenue, suggesting there exists an optimal tax rate for maximizing revenue.