What is Nakawé, LLC's economic profit (or loss)?

What is Nakawé, LLC's economic profit (or loss)?

Economic Profit Calculation:

To calculate Nakawé, LLC's economic profit (or loss), we need to consider the total cost of producing 1000 greeting cards, which is $4000, and the price of a greeting card, which is $4.

Total Revenue: 1000 greeting cards x $4 = $4000

Total Cost: $4000

Economic Profit (or Loss) = Total Revenue - Total Cost

Economic Profit (or Loss) = $4000 - $4000

Economic Profit (or Loss) = $0

Based on the calculation, Nakawé, LLC has an economic profit of $0. This means that the firm is neither making a profit nor incurring a loss from selling greeting cards in the competitive market. It is important for the firm to analyze its pricing strategy, production costs, and market demand to improve its economic profitability in the future.