Answer:
a) To calculate the profit per unit, we need to subtract the average cost from the price:
Profit per unit = Price - Average cost
Profit per unit = $12 - $8
Profit per unit = $4
b) The markup is the percentage of the price that exceeds the cost:
Markup percentage = (Price - Average cost) / Average cost * 100%
Markup percentage = ($12 - $8) / $8 * 100%
Markup percentage = 50%
c) The total profit earned by the firm can be calculated as the profit per unit multiplied by the quantity produced, minus the total cost:
Total profit = (Price - Average cost) x Quantity - Total cost
Total profit = ($12 - $8) x 175 - ($4 x 175)
Total profit = $4 x 175 - $700
Total profit = $700
Therefore, the total profit earned by the firm is $700.