A certain firm produces and sells staplers. Last year, it produced 5,000 stapler

Question

A certain firm produces and sells staplers. Last year, it produced 5,000 staplers and sold each stapler to $9. producing the 5,000 staplers, it incurred variable costs of S15.000 and a total cost of $40.000. 10. Refer to Scenario 13-5. The firm's fixed costs amounted to a. $15,000. b. $25,000. c. $30,000. d. $40,000. 11. Refer to Scenario 13-5. In producing the 5,000 staplers, the firm's average variable cost was a. $3 b. $5. c. $8. d. $9 Refer to Scenario 13-5. In producing the 5,000 staplers, the firm's had an economic a. b. c. d. 12. Loss of $5,000 Profit of $5,000 Profit of $20,000. Profit of $30,000.

Explanation / Answer

10. The right answer is option b. $25,000.

Explanation: Total cost consists of fixed cost and variable costs. Fixed cost = total cost - variable cost = $40,000 - $15,000 = $25,000

11. The right answer is option a. $3

Explaantion: Average variable cost = total variable cost / total output = $15,000/ $5,000 = $3.

12. The right answer is option b. profit of $5,000

Explanation: Total revenue = output * per unit selling price = 5000 * $9 = $45,000

Total cost = $40,000

Total conomic profit = $45,000 - $40,000 = $5,000.

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