Table 10.1
$\begin{array}{|c|c|c|}
\hline \text { Quantity } & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & \$ 1,000 & \$ 0 \
\hline 100 & 1,360 & 360 \
\hline 200 & 1,560 & 560 \
\hline 300 & 1,960 & 960 \
\hline 400 & 2,760 & 1,760 \
\hline 500 & 4,000 & 3,000 \
\hline 600 & 5,800 & 4,800 \
\hline
\end{array}$
Table 10.1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units.
-Refer to Table 10.1.If the market price of each camera case is $8 and the firm maximizes profit, what is the amount of the firm's profit or loss?

Question

Table 10.1
 $\begin{array}{|c|c|c|}
\hline \text { Quantity } & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & \$ 1,000 & \$ 0 \
\hline 100 & 1,360 & 360 \
\hline 200 & 1,560 & 560 \
\hline 300 & 1,960 & 960 \
\hline 400 & 2,760 & 1,760 \
\hline 500 & 4,000 & 3,000 \
\hline 600 & 5,800 & 4,800 \
\hline
\end{array}$ 
Table 10.1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units.
-Refer to Table 10.1.If the market price of each camera case is $8 and the firm maximizes profit, what is the amount of the firm's profit or loss?

Quizplus · Accepted Answer

To determine the profit-maximizing output level, we need to find the output level where marginal cost (MC) equals market price (P). We can see from the table that at an output level of 400, MC is equal to $8, which is the market price. Therefore, the profit-maximizing output level is 400.

At an output level of 400, the total cost is $2,760 and the total revenue is:

400 * $8 = $3,200

Therefore, the profit is:

$3,200 - $2,760 = $440

Since the profit is positive, the firm is making a profit. The correct answer is (C).

Table 101 Table 101 Shows the Short-Run Cost Data of a Perfectly Competitive