Homework Answers
Question 6
Economic profit is the excess of total revenue over total cost.
Output produced = 50 units
Average total cost = $3 per unit
Market price = $7 per unit
Calculate the total revenue -
Total revenue = market price * output produced
Total revenue = $7 * 50 = $350
The total revenue is $350
Calculate the total cost -
Total cost = Average total cost * Output produced
Total cost = $3 * 50 = $150
The total cost is $150
Calculate the total economic profit -
Economic profit = Total revenue - Total cost
Economic profit = $350 - $150 = $200
Thus,
The total economic profit is $200.
Hence, the correct answer is the option (c).
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