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# Caskets are produced in a monopolistic competitive market.

Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of \$550 each. Its average total cost is \$600. From this information, we know that:

new casket firms will want to enter.

this producer is losing \$1,000 a week.

this producer is making an economic profit of \$500.

this producer is setting marginal revenue = marginal cost.

this producer is making an economic profit of \$500.Explanation

total revenue is 20(550) = \$11000

The total cost= \$600

economic profit is found by subtracting the total cost from the total revenue generated

11,000 – 600 = 500

the economic profit is \$500

this producer is making an economic profit of \$500.

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