ECONOMICS

Detailed explanation-1: -The correct answer is The price of a commodity is 10 per unit and total revenue from it is 1, 000. Its price elasticity of supply is 0.8.

Detailed explanation-2: -Profit for a firm is total revenue minus total cost (TC), and profit per unit is simply price minus average cost.

Detailed explanation-3: -Accounting profits are the firm’s total revenues from sales of its output, minus the firm’s explicit costs. Economic profits are total revenues minus explicit and implicit costs.

Detailed explanation-4: -A perfectly competitive firm is producing 10 units of output and sells the product for $5 per unit. At this level of output the average total cost is $4, the average variable cost is $3 and the marginal cost is $7.