A perfectly competitive firm producing 100 units of output per period finds that: average total cost is $20; average variable cost is $12; marginal cost is $18 and increasing; price of the product is $15. this firm should

Question

Brody Lam

Business

4 May, 20:55

A perfectly competitive firm producing 100 units of output per period finds that: average total cost is $20; average variable cost is $12; marginal cost is $18 and increasing; price of the product is $15. this firm should

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Domino · Answer 1

This is the concept of business mathematics. The question requires us to calculate the profit margin given the that the cost of production is $20, variable cost is $12 and marginal cost is $18. Also we are told that the price per product is $15.

Profit=Revenue-Cost

Revenue=100*15=$1500

Total cost=20+12+18=$50

Therefore the profit margin will be:

1500-50

=$1450