The Sweet Success Bakery sells 400 cakes at a price of $10 per cake. Its total economic costs for producing 400 cakes are $500. The Sweet Success Bakery's economic profits are
A) $100.
B) $3,500.
C) $4,500.
D) indeterminate from this information.

Question

Quizplus · Accepted Answer

Total revenue from selling 400 cakes at $10 per cake = $4,000
Total economic costs for producing 400 cakes = $500
Economic profit = total revenue - total economic costs
Economic profit = $4,000 - $500 = $3,500

The Sweet Success Bakery Sells 400 Cakes at a Price