The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.Table 9.2

-Goodspeed Automobiles manufactures 100 disc brake cylinders. At this output level, its marginal revenue is equal to its marginal cost. If the revenue per unit of output is $500 and the per unit cost is $350, its profit is:
A)$20,000.
B)$15,000.
C)$45,000.
D)$25,000.
E)$10,000.

Question

The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.Table 9.2
 
-Goodspeed Automobiles manufactures 100 disc brake cylinders. At this output level, its marginal revenue is equal to its marginal cost. If the revenue per unit of output is $500 and the per unit cost is $350, its profit is:
A)$20,000. 
B)$15,000. 
C)$45,000. 
D)$25,000. 
E)$10,000.

Quizplus · Accepted Answer

At 100 units of output, the profit per unit is:

Profit per unit = revenue per unit - cost per unit
Profit per unit = $500 - $350
Profit per unit = $150

Therefore, the total profit is:

Total profit = profit per unit × number of units
Total profit = $150 × 100
Total profit = $15,000

Therefore, the best choice is B.

The Table Given Below Reports the Marginal Revenue and Marginal