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Loraine Loraine
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8 years ago
Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed cost of $25,000, average variable cost for 1,000 service calls is $45, and marginal revenue is $75. Juan's makes 1,000 service calls a month. What is his economic profit?
A) $5,000
B) $25,000
C) $45,000
D) $75,000
E) $50,000
Textbook 
Essential Foundations of Economics

Essential Foundations of Economics


Edition: 7th
Authors:
Read 311 times
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Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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SmooothSmoooth
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8 years ago
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#2
8 years ago
No problemo Happy Dummy
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#3
A year ago
Use the figure above to answer this question.  Which of the following is true regarding the firm's its supply decision?
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#4
Educator
A year ago
Quote from: Christophe Ramoni (A year ago)
Use the figure above to answer this question. Which of the following is true regarding the firm's its supply decision?

Is this the figure you speak of?



If so, the answer is:

Can't determine the shutdown point. we need more information for calculating the shutdown point.

Explanation

The shutdown price of a firm is equal to Price=Average variable cost. In the above graph, the average variable cost is not mentioned. so we need more information for finding the shutdown price. In the above graph break-even point is Price equal to the average total cost. The Break-even price is $6 and the break-even quantity is 1000 units. All other options are wrong.
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