-The table above shows the total cost incurred by Sue's Coat Shop, a perfectly competitive firm. If the market price of a coat is $285, Sue's will maximise economic profit by selling _______ coats a day.

Question

Quizplus · Accepted Answer

To maximize economic profit, Sue's Coat Shop should produce at the level where marginal cost (MC) is equal to the market price, as long as the price is above average variable cost (AVC) to avoid losses. Without the table, we can't calculate the exact numbers, but the principle is that the firm will adjust its output to where the price ($285) equals the MC of producing an additional unit, which, based on the given options, suggests producing 9 coats a day is the most profitable choice.

-The Table Above Shows the Total Cost Incurred by Sue's