A firm produces a product which it sells in a perfectly competitive market. The price of the product is R120per unit and the firm's cost structure is given in the table below. Use the table below to answer thequestionUnitsFixed cost Variable cost Total cost Average cost Marginal costproduced (Q) (FC)(VC)(TC)(AVC)(MC)48012345610056421688How many units must the firm produce in order to maximise profits?a) 6 unitsb) 2 unitsc) 5 unitsd) 4 units32104

Profit, difference of TR over TC, is highest at the unit of output where marginal cost matches the…

A firm produces a product which it sells in a perfectly competitive market. The price of the product is per unit and the firm's cost structure is given in the table below. Use the table below to answer the question Units Fixed produced (Q) (FC) 0 1 2 3 4 5 6 cost Variable cost Total cost Average cost Marginal cost (VC) (TC) (AVC) (MC) 48 100 564 216 88 How many units must the firm produce in order to maximise profits? a) 6 units b) 2 units c) 5 units d) 4 units 32 104