Multiple Choice
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. Homer's fixed cost is equal to
A) 0.
B) $5,000.
C) $16,000.
D) $21,000.
Correct Answer:
Verified
Correct Answer:
Verified
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