Figure 8.5 Figure 8.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 8.5.If the market price is $20, the amount of the firm's profit is
A)$5400
B)$6750
C)$8100
D)$16 200

Question

Figure 8.5  Figure 8.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 8.5.If the market price is $20, the amount of the firm's profit is
A)$5400 
B)$6750 
C)$8100 
D)$16 200

Quizplus · Accepted Answer

The firm's profit is calculated by subtracting total cost from total revenue. If the market price is $20, you need to find the quantity where the price equals marginal cost and then calculate the total revenue and total cost at that quantity to find the profit.

Figure 85 Figure 8