Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $15 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to a. zero. b. its normal profit. c. more than zero but less than $500. d. $500. e. more than $500.
Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $15 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to a. zero. b. its normal profit. c. more than zero but less than $500. d. $500. e. more than $500.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the
a. |
zero. |
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b. |
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c. |
more than zero but less than $500. |
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d. |
$500. |
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e. |
more than $500. |
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