3. Equilibrium P/Q Which of the following statements is correcti? A. If there is

Question

3. Equilibrium P/Q Which of the following statements is correcti? A. If there is a shortage at a given price then that price is less than the equilibrium price. B. If there is a surplus at a given price then that price is equal to the equilibrium price. C. If there is a surplus at a given price then that price is less than the equilibrium price. D. If there is a shortage at a given price then that price is greater than the equilibrium price. 4. Costs Sally had been working at an investment bank for a year with an income of $100,000 when she realized she would like to run her own business. She estimates her costs per year to be: rent- $25,000, material $10,000, labor $30,000, and hopes to have revenue of $300,000. Based on these assumptions, what is Sally's economic profit? A. $135,000 B. $235,000 C.$35,000 D. $0

Explanation / Answer

Ans) A is the correct option. If there is a shortage at a given price then that price is less than the equilibrium price. When there is shortage quantity demanded exceeds the quantity supplied.

Ans) B is the correct option. $235,000

economic profit = total revenue - total cost

= 30,000 - ( 25,000 + 10,000 + 30,000) = 235,000

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.