Calculate Sara’s profit-maximizing output, price, and economic profit.
Sara is a dot.com entrepreneur who has established a Web site at which people can design and buy sweatshirts. Sara pays $1,000 a week for her Web server and Internet connection. The sweatshirts that her customers design are made to order by another firm, and Sara pays this firm $20 a sweatshirt. Sara has no other costs. The table sets out the demand schedule for Sara’s sweatshirts.
Price Quantity demanded
(dollars per sweatshirt) (sweatshirts per week)
0 ……………………………………… 100
20 ……………………………………… 80
40 ……………………………………… 60
60 ……………………………………… 40
80 ……………………………………… 20
100 ……………………………………… 0