Mary Magnolia Has Variable Costs Equal to Y²/F, Where Y

question 9

Multiple Choice

Mary Magnolia has variable costs equal to y²/F, where y is the number of bouquets she sells per month and where F is the number of square feet of space in her shop.If Mary has signed a lease for a shop with 1,400 square feet, if she is not able to get out of the lease or to expand her store in the short run, and if the price of a bouquet is $3 per unit, how many bouquets per month should she sell in the short run?

• A)1,400
• B)3,150
• C)700
• D)2,100
• E)2,310

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Definitions:

Accrued Interest

The interest that has accumulated on a bond or other fixed-income security since the last interest payment was made.

Settlement

The process of exchanging payment for financial transactions, including securities, at their completion.

Semiannual Coupon

Bonds that pay interest to the holder twice a year.

Accrued Interest

Interest that has been incurred but not yet paid, typically relevant in bond investments.