The data are for a firm operating in perfect competition.

-Use Table 8.7 to answer this question.If the market price is $80,what is the profit-maximizing output and will be the firm profit or loss?

Question

The data are for a firm operating in perfect competition.
 
-Use Table 8.7 to answer this question.If the market price is $80,what is the profit-maximizing output and will be the firm profit or loss?

Quizplus · Accepted Answer

At a market price of $80, the firm maximizes profit by producing where marginal cost equals the market price. Without the table, we assume the closest match to this condition is at 6 units. Profit or loss is determined by comparing total revenue to total cost. The choice indicates a loss, suggesting total costs exceed total revenue by $36 at this output level.

The Data Are for a Firm Operating in Perfect Competition