Answer:
economic profit = $2000
Explanation:
given data
currently maximizes profit = 400 units
marginal cost = $25
average total cost = $20
to find out
earning economic profit
solution
first we get here Total revenues that is express as
Total revenues = currently maximizes profit × marginal cost
Total revenues = 400 × $25
Total revenues = $10000
and Total cost will be
Total cost = currently maximizes profit × average cost
Total cost = 400 × $20
Total cost = $8000
so economic profit will be
economic profit = Total revenues - Total cost
economic profit = $10,000 - $8,000
economic profit = $2000
