Total cost schedule for a competitive firm: $$\begin{array} { c c }
\text { Output } & \text { Tatal Cost } \
\hline 0 & \$ 10 \
1 & 60 \
2 & 80 \
3 & 110 \
4 & 165 \
5 & 245 \
\hline
\end{array}$$ If market price is $60,what is the maximum profit the firm can earn?

Question

Total cost schedule for a competitive firm: $$\begin{array} { c c } 
\text { Output } & \text { Tatal Cost } \
\hline 0 & \$ 10 \
1 & 60 \
2 & 80 \
3 & 110 \
4 & 165 \
5 & 245 \
\hline
\end{array}$$ If market price is $60,what is the maximum profit the firm can earn?

Quizplus · Accepted Answer

The firm maximizes profit where marginal cost equals market price. At output 3, total cost is $110, and revenue is $180 (3*$60), giving a profit of $70. At output 4, total cost is $165, and revenue is $240 (4*$60), giving a profit of $75, which is the maximum.

Total Cost Schedule for a Competitive Firm If Market Price Is $60,what Is the Maximum Profit the c