Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for $20.
Refer to Scenario 14-3. At Q=500, the firm's profits equal
- $4,000.
- $1,000.
- $10,000.
- $7,000.