A perfectly competitive firm faces a market-determined price of $30 for its product. Fill in columns...

A perfectly competitive firm faces a market-determined price of $30 for its product. Fill in columns and answer the question below.

(1)	(2)	(3)	(4)	(5)	(6)	(7)
Quantity	Total cost	Average total cost	Marginal cost	Marginal revenue	Profit margin	Total profit
0	$1,500
150	$4,000
300	$6,600
450	$9,600
600	$14,000
750	$19,200

The competitive firm should produce _____ units to maximize profit.

Expert Solution

Quantity	Total cost	Average total cost = Total Cost/Quantity	Marginal cost = Change in TC/Change in Quantity	Total Revenue = Q*P	Marginal revenue= Change in TR/Change in Q	Profit margin =(Total profit/Total Revenue)*100	Total profit=TR-TC
0	1,500
150	4,000	26.67	16.67	4500	30	11.11	500
300	6,600	22.00	17.33	9000	30	26.67	2,400
450	9,600	21.33	20.00	13500	30	28.89	3,900
600	14,000	23.33	29.33	18000	30	22.22	4,000
750	19,200	25.60	34.67	22500	30	14.67	3,300

The firm should produce 600 units to maximise profit.

Rahul Sunny answered 2 years ago

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