Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. $$\begin{array}{l}
\begin{array} { | l | l | }
\hline \text { Price } ( \$ ) & \text { Quantity } \
\hline 5 & 1000 \
\hline 5 & 1250 \
\hline 5 & 1500 \
\hline 5 & 1750 \
\hline 5 & 2000 \
\hline
\end{array}\
\text { TABLE 9- } 1
\end{array}$$
-Refer to Table 9- 1. Suppose this firm is producing 1500 mousetraps and its average total cost is
$5.10 per unit. The firm will be
A) suffering losses of $7650.
B) suffering losses of $150.
C) breaking even.
D) earning profits of $150.
E) earning profits of $7650.

Question

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. $$\begin{array}{l}
\begin{array} { | l | l | } 
\hline \text { Price } ( \$ ) & \text { Quantity } \
\hline 5 & 1000 \
\hline 5 & 1250 \
\hline 5 & 1500 \
\hline 5 & 1750 \
\hline 5 & 2000 \
\hline
\end{array}\
\text { TABLE 9- } 1
\end{array}$$
-Refer to Table 9- 1. Suppose this firm is producing 1500 mousetraps and its average total cost is
$5.10 per unit. The firm will be
A) suffering losses of $7650.
B) suffering losses of $150.
C) breaking even.
D) earning profits of $150.
E) earning profits of $7650.

Quizplus · Accepted Answer

The firm is selling each unit for $5 but the cost is $5.10, resulting in a loss of $0.10 per unit. For 1500 units, the total loss is $150.

Consider the Price and Quantity Data Below for a Perfectly