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Managerial Economics · Quiz 2 · 3 Aug 2025 · May 2025 term

Question 12: Suppose the average variable cost of the firm is given b…

Question 12

+1 markOne correct option

Suppose that a competitive firm’s marginal cost of producing output q is given by MC(q)=6+4q. Assume that the market price of the firm’s product is ₹18.
Based on the above data, answer the given subquestions.

Suppose the average variable cost of the firm is given by AVC(q)=3+q and firm’s fixed costs are known to be ₹3, the firm be earning

  1. A

    Positive economic profit

  2. B

    Negative economic profit

  3. C

    Zero economic profit

  4. D

    Cannot say

Show answer

Correct answer

  • A

    Positive economic profit

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Question 12 of 31 in the IIT Madras BS Managerial Economics (Managerial Economics) Quiz 2 paper sat on 3 Aug 2025, in the May 2025 term (IIT M DEGREE AN EXAM QDB2 03 Aug 2025). It carries 1 mark.

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