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Homework answers / question archive / Figure: A Perfectly Competitive Firm in the Short Run ATC $490 $450 $300 $225 205 260 339 365 Referencer Ret 12-11 (Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run
Figure: A Perfectly Competitive Firm in the Short Run ATC $490 $450 $300 $225 205 260 339 365 Referencer Ret 12-11 (Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run. If the market price is $300, the firm's total economic profit is: O $50, 850 O $42.900 none of the above - $78,000 0 - $50.700
Explanation :
Firm maximises it's profit where MR equals MC. In perfect competition price is equals to MR. Because price is above average variable cost, firm will produce to minimise losses. Here at quantity 260 MR equals MC.
Profit =(Price - ATC) *quantity
=(300-495)*260
=-50,700
