In Figure 24.2, total profit at the profit-maximizing rate of output is
A) $16.00.
B) $5.50.
C) $6.00.
D) $22.00.

Question

In Figure 24.2, total profit at the profit-maximizing rate of output is
A) $16.00. 
B) $5.50. 
C) $6.00. 
D) $22.00.

Quizplus · Accepted Answer

The profit-maximizing rate of output is where marginal revenue equals marginal cost, which occurs at a quantity of 5 units in Figure 24.2. At this quantity, total revenue is $30.00 and total cost is $24.00, resulting in a total profit of $6.00 (TR-TC=$30.00-$24.00=$6.00). Therefore, the correct answer is C ($6.00).