Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin's: Select one:

a. average fixed cost is $1.50.

b. economic profit is $250.

c. profit per bushel is $2.75.

d. average variable cost is $1.25.

Question

Business

Quinn Simmons

5 January, 18:37

Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin's: Select one:

a. average fixed cost is $1.50.

b. economic profit is $250.

c. profit per bushel is $2.75.

d. average variable cost is $1.25.

+1

Answers (1)

Know the Answer?

Eric Villanueva · Answer 1

c. profit per bushel is $2.75.

Explanation:

Let's calculate all of the parameters presented in the alternatives and compare to the real values:

Units sold = 100

Total cost per unit = $1.75

Total revenue = $450

Total fixed costs = $100

Average fixed cost = $100/100 = $1.00

Economic profit = $450 - ($1.75*100) = $275

Profit per bushel = $275/100 = $2.75

Average variable cost = $1.75 - $1.00 = $0.75

Therefore, the only alternative that presents correct values is c. profit per bushel is $2.75