Question

1)

Given the following cost information for a price-taking firm, what is the profit-maximizing quantity given a market price of $80.

Quantity	0	1	2	3	4	5	6	7	8
Total Cost	100	200	250	280	300	340	400	480	600

              

Group of answer choices

a Q = 0

b Q = 7

c Q = 5

d Q = 3

2)

Suppose a price-taking firm has the following costs:

Quantity	0	1	2	3	4	5	6
Total Cost	200	260	300	350	410	490	590

      

At which of the following prices would this firm earn the most profit?

Group of answer choices

a $40

b $80

c $100

d $50

Answer 1

1) firm will A price taking firm i.e., perfectly competitive produce at the output level Panc where (in order profit). 5 At MC- Ta - TCC STC 7-6 14_80 - 400 10 7-6 Ple, $50 option (6) TC MC (%) b 200 Notes T maxing 2 360 Conditum conditions under competitive market is to produce when 3 350 P=MC 410 60 S 490 6 590 leo At P. $40 it'll produce Q = 2 = (2x40) - 300 25 - $220 At P = $80 --$90 it'll produce od=5 12:180x5)- 490 At P = $100 t'll produce of a r. (100x6) At P = $50 it'll produce d. 3 r (50x3) 350 option tool (6) 590 $10 (Max. r) 200 1.4 Camlin