Final answer:
Based on the information provided, the competitive firm is making a profit since its total revenue exceeds its total cost by $60.
Step-by-step explanation:
The student's question pertains to a competitive firm's total cost and total revenue to determine its financial status. Based on the given information, the firm has chosen a price and quantity that place its total revenue at $640 and its total cost at $580, resulting in a profit of $60. This is because the price of $16 per unit at a quantity of 40 is above the average cost curve which indicates the firm is making economic profits. The profit is calculated as total revenues minus total costs, which equates to the shaded area above the average cost curve in Figure 10.3, demonstrating that the firm's revenues exceed its costs.