Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $15 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to

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At the profit-maximizing level of output (100 units), total cost (TC) is the sum of total fixed cost (TFC) and total variable cost (TVC), which equals $600 + $400 = $1000. The total revenue (TR) at this level, with a price of $15 per unit for 100 units, is $15 * 100 = $1500. Economic profit is calculated as total revenue minus total cost, so the economic profit is $1500 - $1000 = $500.

Assume That Marginal Revenue Equals Rising Marginal Cost at 100