Table 12-3 Arnie Sells Basketballs in a Perfectly Competitive Market. Table 12-3

question 79

Multiple Choice

Table 12-3

Arnie sells basketballs in a perfectly competitive market. Table 12-3 summarizes Arnie's output per day (Q) , total cost (TC) , average total cost (ATC) and marginal cost (MC) .
-Refer to Table 12-3.What price (P) will Arnie charge and how much profit will he earn if the market price of basketballs is $12.50?

• A)Price and profit cannot be determined from the information given.
• B)P = $12.50; profit = $52.50
• C)P = $12.50; profit = $22.50
• D)P = $20; profit = $75.00.

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Definitions:

Long Run

In economics, this term describes a period in which all factors of production and costs are variable, allowing full adjustment to any change.

Total Profit

The financial gain made after subtracting all expenses from total revenue.

Profit-Maximizing

A strategy or process employed by businesses to determine the price and output level that returns the highest profit.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply of a good or service, and where entry of new competitors is obstructed.