Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1

-Refer to Table 9-1. If the market price is $500, what is the maximum economic profit per month the Tuckers can earn?
A) −$50
B) zero
C) $50
D) $100

Question

Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1
 
-Refer to Table 9-1. If the market price is $500, what is the maximum economic profit per month the Tuckers can earn?
A) −$50 
B) zero 
C) $50 
D) $100

Quizplus · Accepted Answer

The maximum economic profit is earned when the market price is equal to the marginal cost. From Table 9-1, we can see that the marginal cost is $500. Therefore, the maximum economic profit is $500 - $500 = $0.

Use the Table of Expected Cost and Revenue Data for the Tuckers