Question

g Suppose Marcia's Manioc Farm is a non-price discriminating monopolist producing manioc and is producing its profit-maximizing level of output. Suppose further that at her current level of output, Marcia's average total cost is $1.50, her average variable cost is $1.00, and her marginal cost of producing an additional kilo of manioc is $1.40. Marcia's economic profit is _____ in the short run.

Answer 1

Answer: ambiguous

Explanation:

The profit will be calculated by subtracting the total cost from the total revenue. i.e. Profit = Total revenue - Total cost.

To know the value of the economic profit, the price is required but based on the information given in the question, the price was not given as we were given only the cost. There, in this case, the answer will be "ambiguous" as we do not have all the information required to solve the question.