Table 14-6
The following table presents cost and revenue information for a firm operating in a competitive industry.
-Refer to Table 14-6. What is the total revenue from selling 4 units?

Question

Table 14-6
The following table presents cost and revenue information for a firm operating in a competitive industry. 
-Refer to Table 14-6. What is the total revenue from selling 4 units?

Quizplus · Accepted Answer

To find the total revenue from selling 4 units, we look at the row where Q=4. The price per unit is $120 and the quantity sold is 4 so the total revenue is 4 x $120 = $480.

To find the profit-maximizing level of output, we need to compare the marginal cost and marginal revenue at each level of output. From the table, we can see that MC=P for Q values of 1, 2, and 3. At Q=4, the marginal cost is $140 while the marginal revenue is $120. This means that producing the fourth unit would result in a loss of $20 ($120 - $140). Therefore, the profit-maximizing level of output is 3 units.

Table 14-6 the Following Table Presents Cost and Revenue Information for a for a Firm