Questions
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. 6
B.B. 1
C.C. 3
D.D. 5
E.E. 7
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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 (6 units): Compute TR = price × quantity = 20 × 6 = 120. TC ......Login to view full explanationLog in for full answers
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