A firm sells 30 units of its product at a price of $5 per unit.It incurs a fixed cost of $100 and a variable cost of $20.The firm's profit is ________.

Question

Quizplus · Accepted Answer

The firm's total revenue is 30 units * $5/unit = $150. The total cost is the fixed cost ($100) plus the variable cost (30 units * $20/unit = $600), which is incorrect as it misinterprets the variable cost given. Correctly, the variable cost should be for all units, not per unit, making the total cost $100 + $20 = $120. Thus, the profit is total revenue ($150) - total cost ($120) = $30.

A Firm Sells 30 Units of Its Product at a Price