Table 74 Table 74 Shows the Short-Run Cost Data of a Perfectly Competitive

Table 7.4
$$\begin{array} { | c | c | c | c | } \hline \text { Quantity } & \begin{array} { c } \text { Average } \\\text { Fixed Cost }\end{array} & \begin{array} { c } \text { Average } \\\text { Variable Cost }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost }\end{array} \\\hline 20 & \$ 40 & \$ 18 & \$ 18 \\\hline 40 & 20 & 14 & 10 \\\hline 60 & 13.1 & 16 & 20 \\\hline 80 & 10 & 22 & 40 \\\hline 100 & 8 & 30 & 62 \\\hline 120 & 6.61 & 40 & 90 \\\hline\end{array}$$ Table 7.4 shows the short-run cost data of a perfectly competitive firm. Assume that output can only be increased in batches of 20 units.
-Refer to Table 7.4.If the market price is $45,the firm

A) will earn a profit of $3600.
B) will suffer a loss of $200.
C) will break even.
D) will earn profit of $1040.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free