The table above shows the total cost for Happy Cows, a perfectly competitive dairy farm, at various levels of production. The price for Happy Cows dairy is $10 per unit of dairy product.
-Refer to the table above. What is the profit- maximizing output level for Happy Cows?

Question

Quizplus · Accepted Answer

To find the profit-maximizing output level, we need to find the level of output where marginal cost (MC) equals marginal revenue (MR). 
At an output level of 499, MC is $10 (same as price) and MR is $10 (which is also the price). At any output level above or below 499, MC and MR are not equal, which means that profit is not maximized. Therefore, the answer is D, 499 units of production.

The Table Above Shows the Total Cost for Happy Cows