Question
Asked Dec 18, 2019
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If the total cost of producing 11 units of output in this figure is $16, the firm's economic profit at 11 units of output is:
   
    –$8.
    $104.
    $72.
    $8.
Price
$15
14
13
12
11
10
Demand
4
3
||||||||||||
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quantity
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Price $15 14 13 12 11 10 Demand 4 3 |||||||||||| 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quantity

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Expert Answer

Step 1

Total cost (TC) of the firm is given as $16. Since price is equal to the demand, total revenue (TR) of the firm can be calculated as follows:

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TR=P×Q =8x11 = 88

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Step 2

Thus, the TR is $88.

Total profit refers to the remaining total revenue of a firm ...

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Profit = TR - TC = 88 –16 = 72

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