Question

question the table below represents a firms profit for producing and selling flags. assume that if a firm would have the same profit at two different levels of output, then the firm would choose the greater level of output. assume that the only levels of output that the firm can produce are the levels of output given in the table. at what level of output does the firm maximize profits? quantity total cost marginal cost total revenue marginal revenue 0 $3.00 - $0 - 8 $21.72 $2.34 $16.00 $2.00 16 $37.72 $2.00 $32.00 $2.00 24 $54.76 $2.13 $48.00 $2.00 32 $73.80 $2.38 $64.00 $2.00 40 $93.00 $2.40 $80.00 $2.00 provide your answer below: flags

Explanation:

Step1: Calculate profit for each quantity

Profit = Total Revenue - Total Cost.
For quantity 0: Profit = $0 - 3.00=-$3.00
For quantity 8: Profit = $16.00 - 21.72=-$5.72
For quantity 16: Profit = $32.00 - 37.72=-$5.72
For quantity 24: Profit = $48.00 - 54.76=-$6.76
For quantity 32: Profit = $64.00 - 73.80=-$9.80
For quantity 40: Profit = $80.00 - 93.00=-$13.00
Since all profits are negative, and according to the rule that if same profit at different outputs, choose greater output, the firm will choose the highest - quantity level given.

Answer:

40