The following graph shows the costs for a perfectly competitive producer:

-Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?

Question

The following graph shows the costs for a perfectly competitive producer:
 
-Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?

Quizplus · Accepted Answer

The average profit is the difference between the selling price and the cost of production divided by the number of units sold. In this case, the selling price is $40 and the cost of production is $22. Therefore, the average profit is ($40 - $22) / 1 = $18.

The Following Graph Shows the Costs for a Perfectly Competitive