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    Calculating profit/loss in the given cases

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    Answer the next questions on the basis of the following cost data for a firm in pure competition:

    OUTPUT ------ TFC ---------- TVC
    0 $100.00 0.00
    1 100.00 70.00
    2 100.00 120.00
    3 100.00 150.00
    4 100.00 200.00
    5 100.00 270.00
    6 100.00 360.00

    (a.) Refer to the above data. If the product price is $25, at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.

    (b.) Refer to the above data. If the product price is $55, at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.

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    https://brainmass.com/economics/output-and-costs/calculating-profit-loss-in-the-given-cases-378163

    Solution Preview

    Please refer attached file for better clarity of table.

    Output,Q TFC TVC Marginal Cost
    MC*
    0 100 0
    1 100 70 70
    2 100 120 50
    3 100 150 30
    4 100 200 50
    5 100 270 70
    6 100 360 90

    *MC=change in TVC/change in Q

    (a.) Refer to the ...

    Solution Summary

    Solution depicts the steps to calculate profit/loss in the given cases for a purely competitive firm.

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