Scenario 9

Scenario 9.1: 21st Century Pen Inc.produces 2000 pens per day,and hires 20 workers at a cost of $200 per day per worker.The price of each pen is $5 each.21st Century Pen Inc.pays a daily rental rate of $60 on its factory and a daily insurance rate of $20.21st Century Pen Inc.has a ten year lease on the factory and insurance contract for a year,the company has no other expenses.
-Refer to Scenario 9.1.Suppose that 21st Century Pen Inc.continues to produce the same level of output and hires the same number of workers.21st Century Pen Inc.will shut down in the short run if the price falls below:

A) $3.
B) $2.
C) $1.
D) $4.

Correct Answer:

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