Answer:
Economic profit = $40
Explanation:
given data
producing = 20 units
selling = $10 per unit
total fixed costs = $100
average variable cost = $3
output = 20 units
to find out
economic profit of this corporation
solution
we get here revenue that is express as
revenue = 20 units × $10
revenue = $200
and
now we get variable cost is here as
variable cost = 20 units × $3
variable cost = $60
and
now we get here total cost that is express as
total cost = Fixed cost + Variable cost .............1
total cost = $100 + $60
total cost = $160
so now Economic profit will be
Economic profit = Revenue - Total cost ......................2
Economic profit = $200 - $160
Economic profit = $40
