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. At the profit- maximizing output level, how much does Happy Cows earn in profit?

Question

Quizplus · Accepted Answer

Profit is maximized when marginal revenue equals marginal cost. At an output of 100 units, marginal revenue is $50 and marginal cost is $45. Therefore, profit is maximized at an output of 100 units. At this output level, Happy Cows earns $3,460 in profit.

The Table Above Shows the Total Cost for Happy Cows