Use the table below to answer the following questions.
Table 12.2.1

-Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. Economic profit is maximized when the firm produces ________ units of output.

Question

Use the table below to answer the following questions.
Table 12.2.1
 
-Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. Economic profit is maximized when the firm produces ________ units of output.

Quizplus · Accepted Answer

The economic profit is maximized where the difference between total revenue and total cost is the highest. At 6 units of output, the difference between total revenue and total cost is $36 ($90-$54), which is higher than at any other level of output. Therefore, option D is the correct answer.

Use the Table Below to Answer the Following Questions