ples of Microeconomics || Fall20Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000donutshas two costs. First he pays $16.000 in annual rental payments for its five-year lease on itsstore. Second Homer incurs an additional cost of $5,000 for ingredients. Should Homer'sshut down in the short run?per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer'sofSelect one:O a. Yes, because he cannot cover all of his fixed costs.O b. No, because he can cover all of his variable costs,O c. Yes, because he is incurring an economic loss.O d No, because is making positive economic profit,Next page00HUAWEI Nova 3AI CAMERA

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs. First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Should Homer's shut down in the short run? Select one: O a. Yes, because he cannot cover all of his fixed costs. O b. No, because he can cover all of his variable costs. O c. Yes, because he is incurring an economic loss. O d. No, because is making positive economic profit.

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs. First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Should Homer's shut down in the short run? Select one: O a. Yes, because he cannot cover all of his fixed costs. O b. No, because he can cover all of his variable costs. O c. Yes, because he is incurring an economic loss. O d. No, because is making positive economic profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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