A firm is producing 100 units, which is its profit- maximising quantity. The price is $1, the total fixed costs are $40 and the average variable cost for each unit is $1.20. The firm's opportunity costs of being in business are included in both the fixed and variable costs. The firm's economic profit is:
A) $180
B) $0
C) - $60
D) $140

Question

Quizplus · Accepted Answer

The firm's total revenue is $100 (100 units x $1), total cost is $160 (fixed costs $40 + variable costs $120), resulting in an economic profit of -$60.

A Firm Is Producing 100 Units, Which Is Its Profit-