Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are

question 7

Multiple Choice

Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-Quickie Inc., a perfectly competitive firm, currently maximizes profit by producing 400 units of output. If its marginal cost is equal to $25 and its average total cost is $20, then how much is it earning in economic profit?

• A)Economic profit is always equal to zero in perfect competition.
• B)$10,000
• C)$8,000
• D)$2,000
• E)$4,000

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Definitions:

Biome

A large community of plants and animals that occupies a distinct region defined by its climate, flora, and fauna.

Biotic Potential

The maximum reproductive capacity of an organism under optimum environmental conditions.

Environmental Resistance

Total of factors in the environment that limit the numerical increase of a population in a particular region.

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment.