Question
The total cost of production at different output levels for a firm are tabulated below. What is the profit-maximizing level of output at a market price of Rs 10?
QTC (Rs)115222327431538649763
QTC (Rs)115222327431538649763
Answer: Option C
:
C
Let us add the MC column to the table
QTC(Rs)MC(Rs)1151522273275431453876491176314
At an output level of 5, MC =7 < P=10
At an output level of 6, MC =11 > P=10
Hence, the profit is maximum at an output level of 5 because the 6th unit will incur a loss.
Was this answer helpful ?
:
C
Let us add the MC column to the table
QTC(Rs)MC(Rs)1151522273275431453876491176314
At an output level of 5, MC =7 < P=10
At an output level of 6, MC =11 > P=10
Hence, the profit is maximum at an output level of 5 because the 6th unit will incur a loss.
Was this answer helpful ?
More Questions on This Topic :
Latest Videos
Latest Test Papers
Submit Solution