Suppose that a perfectly competitive firm faces a market price of $7 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1 comma 400 units. If the firm produces 1 comma 400 units, its average variable costs equal $6.50 per unit, and its average fixed costs equal $0.80 per unit. Required:
a. What is the firm's maximizing (or loss-minimizing output level?
b. What is the amount of it's economic profits (or losses) at this output level?

1. This firm have the profit maximizing output level of 1400 units because a firm in any industry will maximize profit where MR=MC. Here MR is equal to MC at the output level of 1400. So profit maximizing level of output is 1400 units.

2.  Economic profit = Total revenue - total cost.

Where, Total revenue = Quantity * price

= 1400 * 7

= $9,800  

Total variable cost = AVC * quantity

= 6.50 *1400

= $9,100

Total fixed cost = AFC * quantity

= 0.80 * 1400

= $1,120

Economic profit = Total revenue - Total variable cost   - Total fixed cost

Economic profit = $9,800 - $9,100 - $1,120

Economic profit = -$420

. The  firm is having economic loss equal to 420.

Conclusion: This firm is facing economic loss in its output.

answer; i believe that the correct answer is (d); the business benefits because owners can share responsibilities;

none

explanation:

we're are the selections to pick from?