The table given below shows the total revenue and total cost of producing a commodity.Table 9.1

-In Table 9.1, in order to maximize profits, the firm should produce ____ units of output.
A)five
B)six
C)seven
D)eight
E)nine

Question

The table given below shows the total revenue and total cost of producing a commodity.Table 9.1
 
-In Table 9.1, in order to maximize profits, the firm should produce ____ units of output.
A)five 
B)six 
C)seven 
D)eight 
E)nine

Quizplus · Accepted Answer

To maximize profit, the firm should produce where marginal revenue (MR) equals marginal cost (MC). At 8 units of output, MR=MC=$20, which is the highest profit possible. At any other level of output, the firm either has a lower profit or is incurring a loss.

The Table Given Below Shows the Total Revenue and Total