A perfectly competitive firm maximises profit by producing 50 units. The market price is £2, total fixed cost is £25 and total variable cost is £40. What is the firm’s economic profit?
Correct answer C. £35
Explanation
Total revenue is 50 × £2 = £100 and total cost is £25 + £40 = £65, so economic profit is £100 − £65 = £35.
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