A Firm Is Producing 2,500 Units at Its Optimal Output

question 166

Multiple Choice

A firm is producing 2,500 units at its optimal output, with average variable cost per unit of $4 and average fixed cost per unit of $2.50.If sells its output at $8 per unit, total profit is

• A)$10,000.
• B)$3,750.
• C)$1,500.
• D)$20,000

---

Definitions:

FUTA

The Federal Unemployment Tax Act, which imposes a payroll tax on businesses to fund state workforce agencies.

Wages Expense

The total cost incurred by a company for the payment of wages to employees during a specific period.

FICA Tax Rate

The percentage of income that is taken as tax to fund Social Security and Medicare, paid equally by employees and employers.

Federal Unemployment

Federal Unemployment refers to unemployment tax paid at the federal level by employers to fund state workforce agencies and unemployment insurance for workers who have lost their jobs.