Asked by Gabrielle Monique on Jul 29, 2024
Verified
When it produces and sells 80 units of output, a competitive firm's average total cost is $25 and its profit is $480. What is the firm's total revenue if it sells 85 units of output?
Total Revenue
The total income generated by a firm from its sales of goods or services, calculated as the unit price times the quantity sold.
Average Total Cost
The total cost of production (fixed plus variable costs) divided by the total quantity of output produced.
- Evaluate the fiscal outcome, be it profit or loss, by understanding total revenue, average revenue, and marginal revenue.
Verified Answer
ZK
Zybrea KnightAug 02, 2024
Final Answer :
At Q = 80, profit is $480 = (P - $25) X 80, so P = $31. At Q = 85, TR = $31 X 85 = $2.635.
Learning Objectives
- Evaluate the fiscal outcome, be it profit or loss, by understanding total revenue, average revenue, and marginal revenue.