When the government taxes and spends, each activity affects GDP in the same proportion

Economic profit is:

a. total revenues minus variable costs. b. total revenues minus private costs. c. total revenues minus explicit costs. d. total revenues minus total costs.

If the market price is $3 and a perfectly competitive firm is producing 1,200 units and the marginal cost to produce the 1,200th unit is $4.53, which of the following is true?

A) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is positive. B) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is negative. C) The firm should increase production to maximize profit. D) The firm is maximizing profit.