Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:

A. should close down in the short run.

B. is maximizing its profits.

C. is realizing a loss of $60.

D. is realizing an economic profit of $40.

Economic profit will be $40

So option (d) will be correct option

Explanation:

We have given number of units produced = 20 units

Price of per unit = $10 per unit

So revenue = 20*$10 = $200

Revenue : 20 units * $10 = 200

Fixed cost is given $100

Variable cost: 20 units * $3 = 60

So total cost = Fixed cost + Variable cost = 100 + 60 = $160

So economic profit = Revenue - Total cost = 200 - 160 = $40

So option (d) will be correct answer