A firm using price-floor pricing is able to sell an extra 1,000 units of its excess capacity. Its price-floor price exceeds its marginal cost per unit by $4. The firm's additional profit
A) is zero.
B) is $1,000.
C) is $4,000.
D) cannot be determined from the data supplied.

Question

Quizplus · Accepted Answer

The additional profit is calculated by multiplying the extra units sold (1,000) by the difference between the price-floor price and the marginal cost per unit ($4), resulting in $4,000.

A Firm Using Price-Floor Pricing Is Able to Sell an Extra