Refer to the data provided in Table 9.3 below to answer the following question(s).
Table 9.3
$$\begin{array} { c c c c c c c }
\text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \
\hline 0 & \$ 100 & \$ 0 & \$ 100 & - - & - - & - - \
\hline 1 & 100 & 40 & 140 & 40 & 40 & 140 \
\hline 2 & 100 & 60 & 160 & 20 & 30 & 80 \
\hline 3 & 100 & 90 & 190 & 30 & 30 & 63.33 \
\hline 4 & 100 & 124 & 224 & 34 & 31 & 56 \
\hline 5 & 100 & 180 & 280 & 56 & 36 & 56 \
\hline 6 & 100 & 264 & 364 & 84 & 44 & 60.67 \
\hline 7 & 100 & 372 & 472 & 108 & & 67.43 \
\hline
\end{array}$$
-Refer to Table 9.3. If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ________.
A) five; $140
B) six; $140
C) six; $240
D) seven; $116

Question

Refer to the data provided in Table 9.3 below to answer the following question(s).
Table 9.3
 $$\begin{array} { c c c c c c c } 
\text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \
\hline 0 & \$ 100 & \$ 0 & \$ 100 & - - & - - & - - \
\hline 1 & 100 & 40 & 140 & 40 & 40 & 140 \
\hline 2 & 100 & 60 & 160 & 20 & 30 & 80 \
\hline 3 & 100 & 90 & 190 & 30 & 30 & 63.33 \
\hline 4 & 100 & 124 & 224 & 34 & 31 & 56 \
\hline 5 & 100 & 180 & 280 & 56 & 36 & 56 \
\hline 6 & 100 & 264 & 364 & 84 & 44 & 60.67 \
\hline 7 & 100 & 372 & 472 & 108 & & 67.43 \
\hline
\end{array}$$
-Refer to Table 9.3. If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ________.
A) five; $140
B) six; $140
C) six; $240
D) seven; $116

Quizplus · Accepted Answer

To maximize profits, a firm will produce where marginal cost (MC) is equal to or just below the market price, provided the price is above average variable cost (AVC) to avoid losses. At a market price of $84, producing 6 units fits this criterion as the MC for the 6th unit is $84, which is equal to the market price. Profits are calculated as total revenue minus total costs. For 6 units, total revenue is $6 \times \$84 = \$504$, and total costs (TC) are \$364, making profits $ \$504 - \$364 = \$140$.

Refer to the Data Provided in Table 9 -Refer to Table 9