Use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2015. Bartech's average variable cost function is estimated to be Bartech expects to face fixed costs of $12,000 in 2015
Now, suppose that the 2015 price forecast is drastically revised downward to $5.
-Under the revised forecast how much profit (loss) does Bartech, Inc. expect to earn?
A) $0
B) -$12,000
C) $2,500
D) $16,000
E) $18,000
Correct Answer:
Verified
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