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To maximize p...

Question

To maximize profit, the firm should produce ________.

A

15 units

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B

30 units

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C

35 units

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D

50 units

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Solution

The correct option is C 30 units
Market price is Rs. 100 (i.e., P = AR = MR) and in the table MC is Rs. 100 at quantity 30. So to maximinse profits the firm should produce 30 units at which MC = MR, i.e., Rs. 100.
Quantity
(Q) Variable cost
(VC)
Fixed cost
(FC) Total cost
(TC) Average variable
cost (AVC)
Average total
cost (ATC) Marginal cost
(MC)
0 0 300 300 - - -
5 250 300 550 50 110 50
10 470 300 770 47 77 44
15 700 300 1000 46.67 66.67 46
20 980 300 1280 49 64 56
25 1350 300 1650 54 66 74
30 1850 300 2150 61.67 71.67 100
35 2520 300 2820 72 80.57 134
40 3400 300 3700 85 92.5 176
45 4530 300 4830 100.67 107.33 226
50 5950 300 6250 119 125 284

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