Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs. The restaurant earns $1.3 million in revenues and has $5 million in net worth
Based on this information, what is the economic profit for Laura's Pizza Place?
A) $200,000 B) $400,000 C) $500,000 D) $2.8 million
B
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Consider a graph illustrating the upward sloping supply curve for coffee. What would you expect to happen if the government decided to levy a 75-cents per gallon subsidy on coffee?
a. There would be a movement up along the supply curve. b. There would be a movement down along the supply curve. c. The supply curve would shift to the left. d. The supply curve would shift to the right. e. None of the above.
The four largest firms in an industry account for the following value of industry sales: 12 percent, 8 percent, 5 percent and 4 percent. Calculate the four-firm concentration ratio. Would this industry be regarded as competitive or concentrated?
What will be an ideal response?