Consider a Competitive Industry and a Price-Taking Firm That Produces

question 45

Multiple Choice

Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The profit loss) is

• A)$2,600
• B)$2,000
• C)$4,000
• D)$3,250
• E)none of the above

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Definitions:

Lifespan

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Triple Bottom Line

An accounting framework that goes beyond the traditional profit measure to include social and environmental dimensions.

Company Values

The core principles and beliefs that guide the behaviors, decision-making processes, and cultural environment of an organization.

Reinforce

The action of strengthening or supporting an idea, value, or physical structure to ensure its endurance or credibility.