Schwser Mock exam question

CFA Level I Economics
#1

Hi all,

If a profit-maximizing firm sells 300 units, has total revenue of 12,000, and marginal revenue of 25. Is it most likely the firm earns an economic profit?

The answer says the average revenue (i.e. price) is 40 (12,000/300), which is greater than marginal revenue, therefore the firm earns an economic profit.

However, to earn economic profit, the price/average revenue should be greater than average total cost other than marginal revenue or marginal cost. Can anyone help me explain the answer?

#2

anyone ?

#3

This is a strange question. Is the question phrased exactly like this?

#4

The question is: a profit maxing company in short run equilibrium sell 300 units, has a total revenue of 12,000, and marginal revenue of 25. It is most likely the firm: (answer) “earns a economic profit”.

I cannot explain the answer…