Refer to Scenario 9.10 below to answer the question(s) that follow.
SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly) . Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.
-Refer to Scenario 9.10. The cafe's economic profit is
A) positive.
B) negative.
C) zero.
D) break even.
Correct Answer:
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Q193: Refer to Scenario 9.10 below to answer
Q194: Refer to Scenario 9.10 below to answer
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Q199: A firm stands to lose by operating
Q200: Refer to Scenario 9.10 below to answer
Q201: A(n) _ will shift the short-run industry
Q202: The _ for a perfectly competitive industry
Q203: If the price of an input increases,
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