What Is the Profit Margin Earned If Each Unit Requires

question 43

Multiple Choice

What is the profit margin earned if each unit requires two machine-hours?

• A) 53.33%
• B) 33.33%
• C) 66.67%
• D) 58.73%

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Definitions:

Short Run

A period of time during which at least one input, like equipment or labor, is fixed while others can be varied to change output levels.

Automatic Market Adjustments

The self-regulating behavior of markets where prices and quantities adjust to changes in demand and supply conditions without external intervention.

Purely Competitive Firm

A market structure where firms are price takers and sell homogeneous products with many buyers and sellers, leading to perfect competition.

Economic Profit

The contrast between a company's overall receipts and its full charges, considering both palpable and inferred costs.