In a perfectly competitive market, assume the market price is $10 per unit, and the profit-maximizing quantity is 45 units. If the ATC at 45 units is $8, the profit/loss amount at the profit-maximizing quantity is ______.Multiple choice question.$450$90$100$180
Question
In a perfectly competitive market, assume the market price is 8, the profit/loss amount at the profit-maximizing quantity is ______.Multiple choice question.90180
Solution
To calculate the profit, we need to subtract the total cost from the total revenue.
Step 1: Calculate the total revenue. This is done by multiplying the market price by the quantity. In this case, it would be 450.
Step 2: Calculate the total cost. This is done by multiplying the average total cost (ATC) by the quantity. In this case, it would be 360.
Step 3: Subtract the total cost from the total revenue to get the profit. So, 360 = $90.
So, the profit at the profit-maximizing quantity is $90.
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