The daily profit for the firm when flow rate = 100 units/day, average price = $5.00, average cost = $2.50 is $250
A way to calculate earnings - profit method. While calculating profit for one object, the income formula is straightforward enough: income = price - fee. Total income = unit charge * amount - unit value * amount .
To calculate the daily profit of the firm first find the profit using the formula profit = average price - average cost
profit = $5.00 - $2.50 = $2.5
Then multiply the profit by the flow rate to find the daily profit for the firm.
Daily profit = profit * flow rate
Daily profit = $2.5 * 100 units/day = $250
Therefore the daily profit of the firm is $250
The average cost is in keeping with the unit fee of manufacturing obtained by way of dividing the total cost (TC) via the total output (Q). In line with the unit value of manufacturing, we suggest that each one of the constant and variable fees is taken into attention for calculating the average cost. Accordingly, it is also known as in step with the Unit total price.
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