If a firm faces an average total cost of $100 and sells its product for $115,how much profit does it make when it sells 20 units of the product?
A) $200
B) $115
C) $300
D) $800

Question

Quizplus · Accepted Answer

To calculate the profit, we first need to calculate the total revenue. As the firm sells 20 units of the product for $115 each, the total revenue is 20 x $115 = $2300.
To calculate the total cost, we need to multiply the average cost by the number of units sold. The average cost is given as $100, so the total cost is 20 x $100 = $2000.
Therefore, the profit made by the firm is $2300 - $2000 = $300. Thus, the best choice is C.

If a Firm Faces an Average Total Cost of $100