Author Question: Acme is a perfectly competitive firm. It has the total cost schedule given in the above table. ... (Read 146 times)

FButt · **on:** Jun 29, 2018

Acme is a perfectly competitive firm. It has the total cost schedule given in the above table. Acme's product sells for 8.00 per unit. What amount of output is the most profitable and what is Acme's economic profit or economic loss?

What will be an ideal response?

Question 2

Assuming r is the interest rate, to compute the present value of a dollar to be received a year from today, you

A) multiply the dollar by r.
B) divide the dollar by (1 - r).
C) multiply the dollar by (1 + r).
D) divide the dollar by (1 + r).

mbcrismon · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Acme's profit-maximizing level of output is 7 units. Acme's total economic profit equals its revenue, 56.00 (8.00 per unit 7 units), minus its total cost, 49.80 at this level of output, or 56.00 - 49.80 = 6.20.

Answer to Question 2

D