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Doctors Medicines MCQs Q&A

The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good.

Quantity Sold TR TC Profit
0 0 5
1 5 7
2 10 10
3 15 12
4 20 15
5 25 23
6 30 33
7 35 40
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1 Answers

Quantity Sold TR TC Profit AR = TR/Q
0 0 5 0 - 5 -
1 5 7 5 -7 = - 2 5/1 = 5
2 10 10 10 - 10 = 0 10/2 = 5
3 15 12 15 - 12 = 3 15/3 = 5
4 20 15 20 - 15 = 5 20/4 = 5
5 25 23 25 - 23 = 2 25/5 = 5
6 30 33 30 - 33 = - 3 30/6 = 5
7 35 40 35 - 40 = -5 35/7 = 5

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