A firm receives $10 per unit at an equilibrium level of output of 80 units. The average total cost at 80 units of output is $8. The firm makes a total economic profit of:

Question

Quizplus · Accepted Answer

Total revenue = Price per unit × Quantity = $10 × 80 = $800
Total cost = Average total cost per unit × Quantity = $8 × 80 = $640
Total economic profit = Total revenue − Total cost = $800 − $640 = $160
Therefore, the firm makes a total economic profit of $160.

A Firm Receives $10 Per Unit at an Equilibrium Level