The excess profit made by the firm in the short-run is represented by

Abttodip

2 years ago

There is no T.

akinbobolatreasure

1 year ago

Wrong
To determine the excess profit (abnormal profit) made by the firm in the short run, we need to analyze the graph using the following economic concepts:

1. Total Revenue (TR) = Price (P) × Quantity (Q)


2. Total Cost (TC) = Average Cost (AC) × Quantity (Q)


3. Excess Profit (Abnormal Profit) = TR - TC = (P - AC) × Q



From the diagram:

Price (P) is represented by the horizontal line at PQ.

The firm's cost per unit (AC) is at point W on the AC curve.

The quantity produced is OZ.

Profit per unit is the difference between P and AC (i.e., PV).

Total excess profit is represented by the area OPVY.


Thus, the correct answer is:

B. OPVY