### Perfectly Competitive Firm: Short-Run Revenues, Costs, and Profit#### Table Breakdown- **Columns:** - Labor Input - Quantity of Total Product (Q=TP) - Marginal Product (MP=ΔQ/ΔL) - Variable Cost (VC) at W=$20 - Fixed Cost (FC) - Total Cost (TC=VC+FC) - Marginal Cost (MC=ΔTC/ΔQ) - Average Total Cost (ATC=TC/Q) - Price (P) - Total Revenue (TR=P*Q) - Profit (Π=TR-TC)- **Rows:** - Input values range from 0 to 6, with corresponding calculations for each output level indicating how cost structures and revenues change as input increases.#### Highlights- The **Profit** column indicates that the maximum profit of $80 occurs when the Quantity (Q) is 30.#### Discussion Questions1. What does the relationship between MP and MC indicate?2. At what level of Q is profit maximized?3. Interpret the Total Revenue and Total Cost intersection.#### Educational Question72. In the video, what is the level of output that will maximize the firm’s profit?- Select one: - a. Q=23 - b. Q=26 - c. Q=29 - d. Q=30**Answer:** The level of output maximizing the firm's profit is indicated at Q=30, aligning with the maximum profit value of $80 from the table.

In a perfectly competitive market, there is a large number of firms selling homogenous products at a price determined by the industry. Firms are small enough not to influence the market price. Thus, firms are price taker and the industry is the price-maker.In perfect competition, the equilibrium condition for price and output determination is the equality of price (P) and marginal cost (MC). Price=P=10Marginal cost (MC)=10 at an output level of 29 units⇒ P=MC=10 at Q=29 unitsTherefore, the profit maximising output level is 29 units. Conclusion: Hence, the correct option is (c).

Answered: 72. In the video, what is the level of…

Business

Economics

72. In the video, what is the level of output that will maximize the firm's profit? Select one: a. Q=23 b. Q=26 c. Q=29 d. Q=30

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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