Questions
Assessment 2 - Part A - May 2025
Single choice
The table below provides cost and revenue information for a firm producing hand-made cups. At what level of output does the firm earn normal profit?
Options
A.A. 3
B.B. 6
C.C. 1
D.D. 7
E.E. 5
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Verified Answer
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Step-by-Step Analysis
To determine where the firm earns normal profit, we compare total revenue (TR) with total cost (TC) at each output level.
Option A (3 bowls): TR = price 35 × 3 = 105. TC = 92. Profit = TR − TC = 105 −......Login to view full explanationLog in for full answers
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