Refer to Table 9-3.What will Arnie's output be and how much profit will he earn if the market price of basketballs is $5.00?

Question

Quizplus · Accepted Answer

At a market price of $5.00, Arnie will produce 3 basketballs and incur a total cost of $22.50 ($7.50 fixed cost + $15.00 variable cost). His total revenue will be $15.00 (3 basketballs x $5.00 price). Therefore, his profit will be -$7.50 (total revenue of $15.00 - total cost of $22.50), which corresponds to Choice B.