A firm in a perfectly competitive industry produces its profit-maximizing quantity, 40 units. Industry price is $3, total fixed costs are $45, and total variable costs are $60. The firm's economic profit is
A) $15.
B) $30.
C) $35.
D) $60.

Question

Quizplus · Accepted Answer

The firm's total revenue is 40 units * $3 = $120. Total costs are $45 (fixed) + $60 (variable) = $105. Economic profit is total revenue minus total costs, which is $120 - $105 = $15.

A Firm in a Perfectly Competitive Industry Produces Its Profit-Maximizing