Table 14-8
The following table presents cost and revenue information for Soper's Port Vineyard.

-Refer to Table 14-8.What is Soper's Port Vineyard's economic profit at their profit maximizing point?

Question

Table 14-8
The following table presents cost and revenue information for Soper's Port Vineyard.
 
-Refer to Table 14-8.What is Soper's Port Vineyard's economic profit at their profit maximizing point?

Quizplus · Accepted Answer

Economic profit is calculated as total revenue minus total cost. At the profit maximizing point (where MR = MC), Soper's Port Vineyard's output is 300 units. Total revenue at this output level is $1,500 (300 units x $5 per unit). Total cost at this output level is $1,222 ($322 fixed cost + 300 units x $1 per unit variable cost). Therefore, economic profit is $278 ($1,500 - $1,222). So, the best choice is C.

Table 14-8 The Following Table Presents Cost and Revenue Information for Soper's