Determine what is the restaurants current profit

Reference no: EM13236759

At its current level of production, a pizza restaurant receives $20 for each pizza sold. The short-run average total cost is $10. At the price of $20, the restaurant's marginal cost curve crosses the marginal revenue curve at an output level of 100 pizzas.
i. What is the restaurant's current profit?

Assume that for the pizza restaurant industry, buyers have high demand elasticity and this industry does not require high set up costs. Will the current profits for the typical firm described in subquestion i. remain? Explain why.

Reference no: EM13236759

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