A firm produces a good and generates $6 million in receipts. Wages are $1 million, rent is $500,000,and interest payments are $1 million. ThenA. profits are $3.5 million, the cost of production is $6 million, and households receive incomeequal to $6 million.O B. profits are $1.5 million, the cost of production is $6 million, and households receive incomeequal to $2.5 million.C. profits are $500,000, the cost of production is $2.5 million, and households receive incomeequal to $4.5 million.O D. profits are $500,000, the cost of production is $5 million, and households receive income equalto $4.5 million.

The cost of production of a firm will be the income for households, due to which, households' income…

Answered: A firm produces a good and generates $6…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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