If the total costs of producing 1,500 units of output is $15,000 and this output sold to consumers for a total of $16,500, then the firm would earn economic profits of
A)$31,500.
B)$16,500.
C)$1,500.
D)$15,000.

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting total costs from total revenue. Here, total revenue is $16,500 (from sales) and total costs are $15,000. Therefore, economic profit = $16,500 - $15,000 = $1,500.

If the Total Costs of Producing 1,500 Units of Output