Use the following to answer questions:
Figure: Costs
-(Figure: Costs) Use the figure. At a price of $20, the firm earns profit of:
A) $75.
B) $300.
C) $225.
D) $0, because P = MC at P = $20.

Question

Use the following to answer questions:
Figure: Costs 
-(Figure: Costs) Use the figure. At a price of $20, the firm earns profit of:
A) $75. 
B) $300. 
C) $225. 
D) $0, because P = MC at P = $20.

Quizplus · Accepted Answer

At a price of $20, the firm's total revenue is $20 x 15 = $300. Its total cost is $300 - $75 = $225. Therefore, the firm earns a profit of $300 - $225 = $75.

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