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13 May, 15:52

Suppose a perfectly competitive broccoli farm can produce 35 crates at an output level where marginal revenue equals marginal cost. the price per crate of broccoli is $25 and the average total cost is $30. what is the total profit or loss that this farm is earning

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  1. 13 May, 16:19
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    Note: if a perfectly competitive firm's price is less than the average total cost they are incurring a loss.

    To find the total loss the broccoli farm is incurring:

    price per crate of broccoli $25

    average cost: $30

    crates: $35

    First, multiply the price per crate or broccoli $25 by the 35 crates = $875

    Next, multiply the average cost of $30 by the 35 crates = $1,050

    Then, subtract the two $875 - $1,050 = - $175
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