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Bobby decides to sell lemonade on a hot summer day. If Bobby sells 20 glasses of lemonade for $2.00 per cup, and his average total cost is $1.70, what are Bobby's economic profits for the day?

Sagot :

Menscertoidn
2.00 - 1.7 = .30 30 cents profit per cup
.30 x 20 = 6.00 $6 profit for day

Bobby's economic profit  for the day is $6.

Bobby's economic profit is total revenue less total cost.

Economic profit = total revenue - total cost

Total revenue = price x  glasses of lemonade sold

20 x $2 = $40

Total cost = average total cost x glasses of lemonade sold

$1.70 x 20 = $34

Economic profit = $40 - $34 = $6.

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