Suppose the market price is $10 (this is also the firm's marginal cost), a firm's quantity...

Suppose the market price is $10 (this is also the firm's marginal cost), a firm's quantity sold is 11, and the average total cost for the firm at that price is $7. What is the firm's profit?

		$330
		$0
		$110
		$33
		The firm would not produce at this quantity because it does not maximize the firm's profit.

Solutions

Expert Solution

Option D- $33

Market price = $10

Quantity Sold = 11

Total Revenue = Price * Quantity =10 * 11= $110

Average Total Cost = $7

Average Total Cost = Total Cost / Total Quantity Sold

Total Cost = Average Total Cost * Total Quantity Sold

= $7 * 11 = $77

Profit = Total Revenue - Total Cost

= $110 - $77

= $33

Rahul Sunny answered 1 year ago

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