Figure 8.5 Figure 8.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 8.5.The firm's manager suggests that the firm's goal should be to maximise average profit. If the firm does this, the amount of profit that it will earn is
A)$6600
B)$6750
C)$12 150
D)$36 000

Question

Figure 8.5  Figure 8.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 8.5.The firm's manager suggests that the firm's goal should be to maximise average profit. If the firm does this, the amount of profit that it will earn is
A)$6600 
B)$6750 
C)$12 150 
D)$36 000

Quizplus · Accepted Answer

The average profit is maximised when the firm produces 15 units of output. At this output level, the firm's total profit is $6600.

Figure 85 Figure 8