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.
Answer
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.
