Maxine's Cookie Shop sells chocolate chip cookies in a perfectly competitive market for $2 per dozen. Maxine currently produces 200 dozen cookies per day and average total cost at this level of production is $1.75

What level of profit is this firm earning? Explain.


Maxine's Cookie Shop is earning profits of $50 per day. This can be calculated by taking total revenue ($2 x 200 = $400) and subtracting total cost ($1.75 x 200 = $350).

Economics

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