In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC = $5, and MC = $8. How much economic profit is the firm earning in the short run?a. $0 per unitb. $1 per unitc. $2 per unitd. $3 per unit

$3 per unit

Explanation:

In short run a monopolist and competitive firm try to maximize their profit and minimize costs until the the marginal revenue equals to the marginal cost.

In this question the average variable cost is lower than the marginal cost the difference between both is the profit for the short run.

Economic profit = Cost saving

Economic profit = Marginal Cost - Average variable cost

Economic profit = $8 - $5

Economic profit = $3

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