Scenario 14-2
Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $20 and its average total cost equals $25. The firm sells its output for $30 per unit.
-Refer to Scenario 14-2. At Q = 1,000, the firm's profits equal
A)-$5,000.
B)$2,500.
C)$5,000.
D)$10,000.

Question

Quizplus · Accepted Answer

The firm's profit is calculated as (Price - Average Total Cost) * Quantity. Here, (30 - 25) * 1,000 = $5,000.

Scenario 14-2 Assume a Certain Firm Is Producing Q = 1,000 Units