Question

Assume that Frank, a farmer in a competitive market, is maximizing profits selling 80 bushels of corn. If his total variable cost is $120, and his total fixed cost is $80, and her marginal revenue is $4, then Frank:_______

Answer 1

Frank will be earning positive economic profit.

Step-by-step explanation:

Data provided in the question:

Number of Units sold for maximizing profit = 80 bushels of corn

Total variable cost = $120

Total fixed cost = $80

Marginal revenue = $4

Now,

Marginal revenue is defined as the additional revenue generated by on increasing the sales by one unit.

Here,

The marginal revenue is positive

Therefore,

Frank will be earning positive economic profit.