Microeconomics: Economic Profits

Question

1. Assume ABC Company produces 20 units of output in a purely competitive market and selling it at $10 per unit. Its total fixed costs are $100, and its average variable costs are $3 at 20 units of output. ABC Company is realizing an economic profit of:

a) $100

b) $97

c) $40

d) -$140

Answer 1