Answer:
What are the firm's economic profits (or losses) if it sells 425 comma 000 copies of the antivirus software program at a $1.00 price per copy?
- economic profit = revenue - total costs = $425,000 - $3,075,000 = ($2,650,000)
What are the maximum economic profits that the firm can earn in the short run?
- maximum economic profit = (225,000 x $40) - $2,875,000 = $6,125,000
What is marginal revenue when the firm maximizes its short-run economic profits?
Marginal revenue refers to the revenue generated by selling 1 more unit.
In the long run, after entry of competing firms, to the nearest dollar, and including the correct sign, what amount of economic profits will this firm earn?
On the long run, economic profit will always = 0
Explanation:
price per copy units sold total revenue
$1 425,000 $425,000
$40 225,000 $9,000,000
total cost to produce and sell 425,000 copies = (425,000 x $1) + $2,650,000 = $3,075,000
total cost to produce and sell 275,000 copies = (275,000 x $1) + $2,650,000 = $2,925,000
total cost to produce and sell 225,000 copies = (225,000 x $1) + $2,650,000 = $2,875,000
