Marla sells grapes in a perfectly competitive market. The market price for 1 ton of grapes is $1,000. Marla has 5 tons of grapes to sell. If her total variable cost is $4,600 and her total fixed cost is $400, then Marla is making a normal profit.

Question

Quizplus · Accepted Answer

Marla's total revenue is $5,000 (5 tons x $1,000 per ton). Her total cost is $5,000 ($4,600 variable cost + $400 fixed cost). Therefore, she is making a normal profit, which is equal to zero.

Marla Sells Grapes in a Perfectly Competitive Market