Figure 13-4 -Refer to Figure 13-4.The Candy Store Represented in the Diagram

question 137

Multiple Choice

Figure 13-4
-Refer to Figure 13-4.The candy store represented in the diagram is currently selling Q_a units of candy at a price of P_a.Is this candy store maximizing its profit and if it is not,what would you recommend to the firm?

• A) Yes, it is maximizing its profit by charging the highest price possible.
• B) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Q_d units at a price of P_d.
• C) No, it is not; it should lower its price to P_c and sell Q_c units.
• D) No, it is not; it should lower its price to P_b and sell Q_b units.

---

Definitions:

Wagner Act

A foundational piece of labor legislation in the United States passed in 1935 that established the rights of workers to unionize and to engage in collective bargaining with employers.

Social Security Act

1935 law that created the Social Security system with provisions for a retirement pension, unemployment insurance, disability insurance, and public assistance (welfare).

Pensions

Regular payments made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.

Unemployment Benefits

Payments made by authorized bodies to unemployed individuals on a regular basis to support them financially while they seek new employment.