Question

Consider a firm operating in a perfectly competitive market. The firm is producing 40 units of output, has an average total cost of production equal to $5, and is earning $280 economic profit in the short run. What is the current market price

Answer 1

the current market price is $12

Step-by-step explanation:

The computation of the current market price is shown below:

= Total profit ÷ number of units

= ($280 + 40 units × $) ÷ (40 units)

= ($280 + $200) ÷ (40 units)

= $480 ÷ 40 units

= $12

Hence, the current market price is $12

We simply applied the above formula so that the correct value could come

And, the same is to be considered