-In Figure 24.2,total profit at the profit-maximizing rate of output is

Question

Quizplus · Accepted Answer

The profit-maximizing rate of output is where marginal revenue (MR) equals marginal cost (MC). In this figure, that occurs at a quantity of 5 units, where MR=$10 and MC=$4. At a quantity of 5 units, total revenue is $50 and total cost is $20, resulting in total profit of $30. Therefore, the total profit at the profit-maximizing rate of output is $30 or $6.00 per unit ($30/5 units).