In a situation when a firm is operating in a perfectly co...
In a situation when a firm is operating in a perfectly competitive firm and the total cost is given perfectly competitive firm and the total cost is given as N75.00. If the market price is N7.00 determine the profit. When 25 units are produced
N75.00
N100
N175.00
N125.00
Correct answer is B
Total cost (Tc) = N75.00
Price (P) = N7.00
Output (Q) = N25 units
Profit = ?
To derive the profit of the firm, the total revenue must be expressed. It can be expressed as
Total revenue (TR) = Price (P) × Quantity (q)
Therefore, TR = P × Q
= 7 × 25 units
Tr = N175
Therefore, Profit = TR – TC
= N175 – N75
Profit = N100
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