In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC = $5, and MC = $8. How much economic profit is the firm earning in the short run?
A)$0 per unit
B)$1 per unit
C)$2 per unit
D)$3 per unit

Question

Quizplus · Accepted Answer

Economic profit per unit is calculated as price minus average total cost (ATC). Given the price is $8 and ATC is $6, the economic profit per unit is $8 - $6 = $2.

In a Competitive Market the Price Is $8