Scenario 14-3 Suppose a Certain Competitive Firm Is Producing Q=500 Units of Units

question 324

Multiple Choice

Scenario 14-3
Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for $20.
-Refer to Scenario 14-3. At Q=499, the firm's profits equal

• A)$3,980.
• B)$3,992.
• C)$3,997.
• D)$4,017.

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Definitions:

List Prices

List prices refer to the advertised or official price of a product before any discounts or reductions are applied.

Trade Discounts

Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.

Operating Expenses

Costs associated with a company's main operational activities, excluding the cost of goods sold.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, indicating the financial performance over a specific period.