Final answer:
The answer explains how to calculate profits or losses, identify profitability through average cost, and assess the marginal unit's impact on profits in a business scenario.
Explanation:
The company's profits or losses: The total revenue from selling 5 units for [tex]$25 each is $[/tex]125. However, the total cost of producing these units is [tex]$130, resulting in a loss of $[/tex]5.
Identifying profit or loss: By comparing the price per unit to the average cost per unit, you can determine the firm's profitability. At [tex]$25/unit, which is lower than the average cost of $[/tex]26/unit, the company is experiencing losses.
Marginal unit's impact on profits: At the given quantity and price, each additional unit produced would add to the losses since the firm is already selling below the average cost.
Learn more about Calculating profits and losses in a business scenario here:
https://brainly.com/question/30027741
