Exhibit 8-10
-At the profit-maximizing output level, the firm represented in Exhibit 8-10 experiences

Question

Exhibit 8-10 
-At the profit-maximizing output level, the firm represented in Exhibit 8-10 experiences

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal revenue equals marginal cost, which is at an output of 700 units. At this output level, total revenue is $14,000 ($20 per unit × 700 units) and total cost is $10,800 ($8 per unit variable cost × 700 units + $4,000 fixed cost). Therefore, the profit is $3,200 ($14,000 total revenue - $10,800 total cost).

Exhibit 8-10 -At the Profit-Maximizing Output Level, the Firm Represented in Exhibit