Table 14-7
Sally owns the only shoe store in town.She has the following cost and revenue information.

-Refer to Table 14-7.What is total profit at the profit-maximizing quantity?
A) $100
B) $245
C) $265
D) $395

Question

Table 14-7
Sally owns the only shoe store in town.She has the following cost and revenue information.
 
-Refer to Table 14-7.What is total profit at the profit-maximizing quantity?
A) $100 
B) $245 
C) $265 
D) $395

Quizplus · Accepted Answer

To find the profit-maximizing quantity, we need to look at the marginal cost and marginal revenue. 
At 10 units, MC=$70 and MR=$120, so we can continue selling more. 
At 11 units, MC=$80 and MR=$110, so we should stop here because further units would lead to negative profits. 
Total cost at 11 units is $660, and total revenue is $925. 
Therefore, total profit at the profit-maximizing quantity is $265 ($925 - $660). So the best choice is C).

Table 14-7 Sally Owns the Only Shoe Store in Town.She Has the Has