If a competitive firm is selling 900 units of its product at a price of $10...

If a competitive firm is selling 900 units of its product at a price of $10 per unit and earning a positive profit, then

		its total cost is more than $9,000.
		its marginal revenue is less than $10.
		its average total cost is less than $10.
		the firm cannot be a competitive firm because competitive firms cannot earn positive profits.

Expert Solution

Total revenue=P*Q

TR=10*900

TR=9,000

To earn positive profits TC must be less than 9,000

This will happen when AC is less than 10

Answer-Third option

Rahul Sunny answered 2 years ago

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