Firm earns economic profit

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A firm faces the demand for its product, , as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC LAC = $12 per unit. Answer the next 5 questions using this information.

1. A firm faces the demand and cost conditions for its product given in the figure. If the firm must set a uniform price for the good, what price will it set to maximize its profit in the long run?

A. $12

B. $24

C. $25

D. $30

E. none of the above

2. At the profit-maximizing uniform price, the firm earns economic profit of                     when it engages in uniform pricing.

A. $3,872

B. $4,728

C. $4,874

D. $5,428

E. none of the above

3. Under uniform pricing, consumers enjoy $            of consumer surplus.

A. $1,872

B. $1,936

C. $2,474

D. $2,500

Reference no: EM131491767

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