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Question
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 (Rs.) |
TC (Rs.) |
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 |
Solution
|
Quantity Sold |
TR (Rs ) |
TC (Rs ) |
Profit |
`"AR"="TR"/Q` |
|
0 |
0 |
5 |
0 − 5 = −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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RELATED QUESTIONS
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The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising the level of output.
|
Quantity Sold |
TC (Rs.) |
|
0 |
5 |
|
1 |
15 |
|
2 |
22 |
|
3 |
27 |
|
4 |
31 |
|
5 |
38 |
|
6 |
49 |
|
7 |
63 |
|
8 |
81 |
|
9 |
101 |
|
10 |
123 |
