Refer to the following:
Total cost schedule for a competitive firm:
$$\begin{array} { c c }
\text { Output } & \text { Total Cost } \
\hline 0 & \$ 10 \
1 & \mathbf { 6 0 } \
\mathbf { 2 } & \mathbf { 8 0 } \
\mathbf { 3 } & 110 \
4 & 165 \
5 & \mathbf { 2 4 5 } \
\hline
\end{array}$$
-If market price is $60, what is the maximum profit the firm can earn?

Question

Refer to the following:
Total cost schedule for a competitive firm:
 $$\begin{array} { c c } 
\text { Output } & \text { Total Cost } \
\hline 0 & \$ 10 \
1 & \mathbf { 6 0 } \
\mathbf { 2 } & \mathbf { 8 0 } \
\mathbf { 3 } & 110 \
4 & 165 \
5 & \mathbf { 2 4 5 } \
\hline
\end{array}$$
-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 revenue is $180 (3 units x $60), and total cost is $110, resulting in a profit of $70. At output 4, total revenue is $240 (4 units x $60), and total cost is $165, resulting in a profit of $75, which is the maximum profit.

Refer to the Following: Total Cost Schedule for a Competitive

Refer to the Following:
Total Cost Schedule for a Competitive