Question

ents Quantity allery Refer to the table which shows the who un cost date of a perfectly competitive form that produces a camera Assume that output can only be increased in baches of 100 un of the market price of each camera casei 57.60, what is the profemming Quart The proft-maximizing quantity quals 100 200 300 Total Cont Dollar $220 1.120 1.520 1,30 2,170 2.TO 44 Variable Cost Do 30 900 1.100 1,600 1,950 2 4.250 5 500 600

Answer 1

P= $7.00

Profit maximizing condition under perfectly competitive market is P=MC

Q	TC	MC=(Change in TC/Change in Q)
0	220	-
100	1120	9
200	1520	4
300	1820	3
400	2170	3.5
500	2870	7
600	4470	16

Because at output level Q=500 units, P=MC.Therefore, the profit maximizing quantity = 500 units.