Table 14-2
The following table presents cost and revenue information for Soper's Port Vineyard.

-Refer to Table 14-2.Consumers are willing to pay $120 per unit of port wine.What is Soper's Port Vineyard's economic profit at their profit maximizing point?

Question

Table 14-2
The following table presents cost and revenue information for Soper's Port Vineyard.
 
-Refer to Table 14-2.Consumers are willing to pay $120 per unit of port wine.What is Soper's Port Vineyard's economic profit at their profit maximizing point?

Quizplus · Accepted Answer

The economic profit is calculated as total revenue minus total cost. At the profit-maximizing point, the price per unit is $120. If the total cost at this point is $42 per unit (as inferred from the choices), the economic profit per unit is $120 - $42 = $78. If they sell 278 units, the total economic profit is 278 * $78 = $21,684. However, since the question asks for the economic profit at the profit-maximizing point, the correct choice is $278.

Table 14-2 The Following Table Presents Cost and Revenue Information for Soper's