If a monopolistically competitive firm is producing 50 units of output where marginal cost equals marginal revenue, total cost is $1,674 and total revenue is $2,000, its average profit is
A)$326.
B)$40.
C)$6.52.
D)impossible to determine without additional information.

Question

Quizplus · Accepted Answer

To find the average profit, we need to first find the firm's profit.

Profit = Total Revenue - Total Cost 
Profit = $2,000 - $1,674 
Profit = $326

To find the average profit, we divide the profit by the quantity produced:

Average Profit = Profit / Quantity 
Average Profit = $326 / 50 
Average Profit = $6.52

Therefore, the answer is (C) $6.52.

If a Monopolistically Competitive Firm Is Producing 50 Units of Output