(Figure: Revenues,Costs,and Profits for Tomato Producers) Use Figure: Revenues,Costs,and Profits for Tomato Producers.The market for tomatoes is perfectly competitive.The market price of a bushel of tomatoes is $18.At the profit-maximizing quantity of output in the figure,the farmer's total revenue is ___,total cost is _,and economic profit is ___.

A) $90;$14;$76
B) $90;$70;$20
C) $30;$42;-$12
D) $48;$56;-$8

Question

(Figure: Revenues,Costs,and Profits for Tomato Producers) Use Figure: Revenues,Costs,and Profits for Tomato Producers.The market for tomatoes is perfectly competitive.The market price of a bushel of tomatoes is $18.At the profit-maximizing quantity of output in the figure,the farmer's total revenue is _____,total cost is _____,and economic profit is _____.

A) $90;$14;$76
B) $90;$70;$20
C) $30;$42;-$12
D) $48;$56;-$8

Lyron Japhet · Accepted Answer

Final Answer : B, Explanation :  In a perfectly competitive market, the profit-maximizing quantity of output is where marginal cost equals market price. At this point, total revenue is calculated by multiplying the quantity of output by the market price, total cost is given by the area under the marginal cost curve up to the profit-maximizing quantity, and economic profit is the difference between total revenue and total cost. Choice B accurately reflects these calculations.

Definitions

Learning Objectives

Learning Objectives

Related questions