Reference: Ref 11-3 (Table: Competitive Firm) Refer to the table. For the seventh unit of output, total profit is:
A) $630.
B) $90.
C) $160.
D) $470.

Question

Reference: Ref 11-3 (Table: Competitive Firm) Refer to the table. For the seventh unit of output, total profit is:
A) $630. 
B) $90. 
C) $160. 
D) $470.

Quizplus · Accepted Answer

To find the total profit for the seventh unit of output, we need to calculate the total revenue and total cost for that unit. From the table, we can see that the price per unit is $70, so the total revenue for the seventh unit is 7 × 70 = $490. The total cost for the seventh unit is the sum of the variable cost and the fixed cost divided by the total output, which is [(35 + 5)/7] + 20 = $30. Therefore, the total profit for the seventh unit is $490 - $30 = $160.

Reference: Ref 11-3 (Table: Competitive Firm) Refer to the Table