Exhibit 7-2 Total revenue and total cost graph In Exhibit 7-2, economic profit for the firm is at a maximum when output per week equals:

Question

Exhibit 7-2  Total revenue and total cost graph  In Exhibit 7-2, economic profit for the firm is at a maximum when output per week equals:

Quizplus · Accepted Answer

Economic profit is at a maximum when the difference between total revenue and total cost is at its highest point. This occurs at the output level where marginal revenue equals marginal cost, which is where the total cost curve is steepest and intersects with the total revenue curve. In Exhibit 7-2, this occurs at an output level of 250 units, which is where economic profit is maximized.

Exhibit 7-2 Total Revenue and Total Cost Graph in Exhibit