Scenario 9-1 Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit.
Refer to Scenario 9-1. At Q = 1,000, the firm's profit amounts to
A) − $200.
B) $1,000.
C) $3,000.
D) $4,000.

Question

Quizplus · Accepted Answer

At Q = 1,000, the firm's revenue is $12,000 (1,000 units x $12 per unit). Its total cost is $11,000 (1,000 units x $11 per unit). Therefore, its profit is $1,000 ($12,000 - $11,000).

Scenario 9-1 Assume a Certain Competitive Price-Taker Firm Is Producing