Use the following to answer question(s): The Restaurant Model

-(Exhibit: The Restaurant Market) The exhibit shows curves facing a typical restaurant in a community.Assume that the market is characterized by many firms, differentiated products, easy entry and easy exit.For the restaurant shown here, its profit per unit is:
A) ae.
B) fd.
C) bf.
D) bd.

Question

Use the following to answer question(s): The Restaurant Model
 
-(Exhibit: The Restaurant Market) The exhibit shows curves facing a typical restaurant in a community.Assume that the market is characterized by many firms, differentiated products, easy entry and easy exit.For the restaurant shown here, its profit per unit is:
A) ae. 
B) fd. 
C) bf. 
D) bd.

Quizplus · Accepted Answer

Profit per unit is calculated as the difference between the price at which the product is sold and the average cost of producing that product. In the exhibit, "b" represents the price at which the restaurant sells its product, and "f" represents the average cost of producing it. Therefore, the profit per unit is the vertical distance between these two points, which is "bf".

Use the Following to Answer Question(s): the Restaurant Model