Suppose that a firm in a competitive market is currently maximizing its short-run profit at an output of 50 units. If the current price is $9, the marginal cost of the 50th unit is $9, and the average total cost of producing 50 units is $4, what is the firm's profit?
A)$0
B)$200
C)$250
D)$450

Question

Quizplus · Accepted Answer

To determine the profit at the current output, we need to first calculate the total revenue and total cost.

Total revenue = price x quantity = $9 x 50 = $450

Total cost = average total cost x quantity = $4 x 50 = $200

Profit = total revenue - total cost = $450 - $200 = $250

Therefore, the firm's profit is $250. Option C is the correct answer.

Suppose That a Firm in a Competitive Market Is Currently