Suppose there are 1600 identical firms producing boxers and the short-run total cost curve for each firm is given by STC = 2q2 + wq, where q is the firm’s output level and w is the wage rate of the workers. If w = 0.01Q, where Q represents the total industry output. Calculate how much will be produce by the industry at a price of $25.

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Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?