Refer to the information provided in Table 8.7 below to answer the following question(s).
Table 8.7 $$\begin{array} { c c l r r }
\begin{array} { c }
\hline\text { Number of } \
\text { cruit Baskets }
\end{array} & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } \
\hline 0 & \$ 50 & \$ 0 & \$ 50 & - - \
1 & 50 & 10 & 60 & 10 \
2 & 50 & 15 & 65 & 5 \
3 & 50 & 21 & 71 & 6 \
4 & 50 & 31 & 81 & 10 \
5 & 50 & 46 & 96 & 15 \
6 & 50 & 68 & 118 & 22\
\hline
\end{array}$$
-Refer to Table 8.7. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $15. To maximize profits, Exotic Fruit should sell ________ fruit baskets and their profit is ________.
A) zero; $0
B) two; -$35
C) three; -$26
D) five; -$21

Question

Refer to the information provided in Table 8.7 below to answer the following question(s).
Table 8.7 $$\begin{array} { c c l r r } 
\begin{array} { c } 
\hline\text { Number of } \
\text { cruit Baskets }
\end{array} & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } \
\hline 0 & \$ 50 & \$ 0 & \$ 50 & - - \
1 & 50 & 10 & 60 & 10 \
2 & 50 & 15 & 65 & 5 \
3 & 50 & 21 & 71 & 6 \
4 & 50 & 31 & 81 & 10 \
5 & 50 & 46 & 96 & 15 \
6 & 50 & 68 & 118 & 22\
\hline 
\end{array}$$
-Refer to Table 8.7. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $15. To maximize profits, Exotic Fruit should sell ________ fruit baskets and their profit is ________.
A) zero; $0
B) two; -$35
C) three; -$26
D) five; -$21

Quizplus · Accepted Answer

To maximize profits, Exotic Fruit should produce where marginal cost (MC) is less than or equal to the market price ($15). At 5 baskets, MC is $15, and profit is calculated as total revenue (5 baskets x $15 = $75) minus total cost ($96), resulting in a profit of -$21.

Refer to the Information Provided in Table 8 -Refer to Table 8