The ERT Company sells lead pencils in a perfectly competitive market for $5 per box of a dozen pencils. The firm currently produces 2,500 boxes of lead pencils each week and average total cost at this level of production is $5.15
What level of profit is this firm earning? Explain.
The ERT Company is earning negative profits of $375 per week. This can be calculated by taking total revenue ($5 x 2,500 = $12,500) and subtracting total cost ($5.15 x 2,500 = $12,875).
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The unemployment caused by minimum wage would be larger if
A) both labor demand and labor supply are more elastic. B) both labor demand and labor supply are more inelastic. C) minimum wage is set equal to the equilibrium wage rate. D) minimum wage is set below the equilibrium wage rate. E) both labor demand and labor supply are perfectly inelastic.
The congressional act that established the U.S. central banking system in 1913 was the
A) Federal Reserve Act. B) Gramm-Rudman Act. C) Employment Act. D) Humphrey-Hawkins Act.