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Finding profit maximizing output level

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Fill in the table and tell me where a competitive firm faced with this cost structure would maximize profit, if price is equal to $50.

Q....TC...MC...TVC...TFC...AVC...AFC
0....100
2....180
4....210
6....260
8....350
10...480

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Solution Summary

Solution describes the steps to find out profit maximizating output level of a perfectly competitive firm.

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Please refer attached file for better clarity of table and formulas.

Solution:

Q TC TFC TVC=TC-TFC AVC=TVC/Q AFC=TFC/Q MC* TR=P*Q Profit=TR-TC
0 100 100 0 0 -100
2 180 100 ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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