Question

If a competitive firm is selling 500 units of its product at a price of $8 per unit and earning a positive profit, then. . .

Answer 1

Its total cost is less than $4,000.

Step-by-step explanation:

Number of units sell by the competitive firm = 500 units

Selling price per unit = $8

Then, the total revenue is as follows:

= Selling price × Number of units sold

= $8 × 500 units

= $4,000

Since the competitive firm is earning a positive profit, so the total revenue is greater than the total cost.

Hence, the total cost must be less than the amount of total revenue i.e, $4,000.