Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
-Refer to Table 15-7. What is total profit at the profit-maximizing quantity?
A)$100
B)$245
C)$265
D)$395

Question

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information. 
-Refer to Table 15-7. What is total profit at the profit-maximizing quantity?
A)$100 
B)$245 
C)$265 
D)$395

Quizplus · Accepted Answer

To find the profit-maximizing quantity, we need to look for the quantity where Marginal Revenue (MR) equals Marginal Cost (MC).

At a quantity of 7, MR = $40 and MC = $15, therefore Sally's profit is ($40 - $15) * 7 = $245. This is the highest profit among all the quantities, so the profit-maximizing quantity is 7, and the total profit is $265 ($245 + $20 fixed costs).

Therefore, the best choice is C.

Table 15-7 Sally Owns the Only Shoe Store in Town. She Has