Comdex Computer Company is producing at a price of 10 with an ...

[jho37]

Comdex Computer Company is producing at a price of 10 with an average total cost of 12and a fixed cost of 300 . The firm is currently producing 100 units.
 
  What are the operating profits of this firm? What are the economic profits of this firm?

Question 2

Assuming the United States is the domestic country, if the real exchange rate between the United States and Russia decreases from 28 to 23,
 
  A) the prices of U.S. goods and services have increased by 22 relative to Russia.
  B) the prices of U.S. goods and services have decreased by 5 relative to Russia.
  C) the prices of U.S. goods and services have increased by 25.5 relative to Russia.
  D) the prices of U.S. goods and services have decreased by 18 relative to Russia.

[Perkypinki]

Answer to Question 1

The firm is making an operating profit of 100 . To calculate this we need the average variable cost. The average fixed cost is 3 (300/100). Subtracting that from the average total cost of 12 yields an average variable cost of 9 . That yields a per unit operating profit of 1 which results in a total operating profit of 100 (1 x 100). The economic profit is -200 (10 - 12) x 100) .

Answer to Question 2

D