Table 5.6 -Refer to Table 5.6.The Equations Above Describe the Demand and the Demand

question 63

Multiple Choice

Table 5.6
-Refer to Table 5.6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

• A)$300 thousand
• B)$600 thousand
• C)$1200 thousand
• D)$1600 thousand

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Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating the contributing profit before fixed costs are deducted.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Markdowns

Reductions in the retail prices of goods, typically to stimulate sales or clear inventory.

Markup

The sum included in the goods' purchase price to account for operational costs and earnings.