The Following Table Shows the Total Revenue and Total Cost

question 36

Multiple Choice

The following table shows the total revenue and total cost (in dollars) from different sales volumes of the good.
Table 2-1
$\begin{array} { | c | c | c | c | } \hline \text { Price } & \text { Quantity } & \text { Total Revenue } & \text { Total Cost } \\\hline 15 & 1 & 15 & 3 \\\hline 14 & 2 & 28 & 7 \\\hline 13 & 3 & 39 & 12 \\\hline 12 & 4 & 48 & 18 \\\hline 11 & 5 & 55 & 25 \\\hline 10 & 6 & 60 & 33 \\\hline\end{array}$

-Refer to Table 2-1. What is the firm's profit from selling 3 units of the good?

• A) $13
• B) $11
• C) $12
• D) $39
• E) $27

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Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business, illustrating its ability to generate and use cash.

Incremental Analysis

An examination of the additional benefits and costs of certain business decisions.

Fixed Overhead

Regular, unchanged costs incurred by a business in its operation, such as rent, salaries, and utilities, which do not vary with the level of production or sales.

Direct Materials

Raw materials used in the production of goods that are directly associated with the finished product.