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assume the price of a product sold by a perfectly competitive firm is $5. given the data in the accompanying table, at what output level is total profit highest in the short run? output total cost 20 $70 25 75 30 85 35 100 40 125 45 155 50 190



Answer :

When the output level is 40 the profit is highest in the short run.

Given,

The price of a product sold by a perfectly competitive firm is $5

To know at which output level is total profit highest in the short run,

From below table,

Output Total Revenue Total Cost Profit

20                 100                       70           30

25                 125                       75           50

30                 150                       85           65

35                 175                       100           75

40                 200                       125           75

45                 225                       155           70

50                 250                       190           60

Hence, from the table when the output level is 40 the profit is highest in the short run.

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