What is the maximum amount of profit that the firm below could generate?
A)-$2,800
B)$2,400
C)$2,480
D)$2,880
E)$5,280

Question

What is the maximum amount of profit that the firm below could generate? 
A)-$2,800 
B)$2,400 
C)$2,480 
D)$2,880 
E)$5,280

Quizplus · Accepted Answer

To find the maximum profit, we need to find the highest price at which the demand and supply are equal. This occurs at a price of $32, resulting in a quantity of 80 being sold. The total revenue at this price is 32 * 80 = $2,560. To find the maximum profit, we need to subtract the total cost from the total revenue. The total cost is 80 * $8 + $400 = $1,120. Therefore, the maximum profit is $2,560 - $1,120 = $1,440. Thus, the correct answer is C.

What Is the Maximum Amount of Profit That the Firm