(Table: Total Cost for a Perfectly Competitive Firm) Use Table: Total Cost for a Perfectly Competitive Firm.If the market price is $4.50,profit at the profit-maximizing quantity of output is:

A) $2.00.
B) $4.50.
C) $5.00.
D) $34.00.

Question

Rochelle Manlapig · Accepted Answer

Final Answer : A, Explanation :  To determine the profit-maximizing output, we need to find the quantity where marginal cost equals marginal revenue. In this case, that quantity is 6 units. At 6 units, the total cost is $20.50 and the total revenue is 6 x $4.50 = $27.00. Therefore, the profit is $27.00 - $20.50 = $6.50. However, we need to subtract the fixed cost of $4.50, leaving us with a profit of $2.00.

(Table: Total Cost for a Perfectly Competitive Firm) Use Table: Total Cost for a Perfectly Competitive Firm.If the market price is $4.50,profit at the profit-maximizing quantity of output is:

A) $2.00.
B) $4.50.
C) $5.00.
D) $34.00.

Definitions

Learning Objectives

Learning Objectives

Related questions

(Table: Total Cost for a Perfectly Competitive Firm) Use Table: Total Cost for a Perfectly Competitive Firm.If the market price is $4.50,profit at the profit-maximizing quantity of output is:A) $2.00.B) $4.50.C) $5.00.D) $34.00.

Definitions

Learning Objectives

Learning Objectives

Related questions

(Table: Total Cost for a Perfectly Competitive Firm) Use Table: Total Cost for a Perfectly Competitive Firm.If the market price is $4.50,profit at the profit-maximizing quantity of output is:

A) $2.00.
B) $4.50.
C) $5.00.
D) $34.00.