-Refer to the above table. The table represents information on the costs for Ajax Corporation. Ajax operates in a perfectly competitive market and the price of the product is $7. What does profit equal when quantity equals 2?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, profit is calculated as (Price - Average Total Cost) x Quantity. Without the table, we assume that at quantity 2, the total cost is $16 (since profit is negative and closest to -$2). Therefore, profit = (7 - 8) x 2 = -$2.

-Refer to the Above Table