Question

Assume a certain firm in a competitive market is producing q = 1,000 units of output. at q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. the firm sells its output for $12 per unit. at q = 1,000, the firm's profits equal

Answer 1

The firm's total cost is 11 x 1000, whereas its revenue is 12 x 1000. Therefore the profit would be 12000 - 11000, meaning that the firm makes a profit of a thousand dollars.