The next 4 (from 9~12) questions refer to the following table showing the total

Question

The next 4 (from 9~12) questions refer to the following table showing the total cost schedule for a perfectly competitive firm. You need to calculate marginal costs (MC) at each output rate to answer.   

9.If market price is $40, how many units of output will the firm produce for profit-maximization?

2 units of output

3 units of output

4 units of output.

5 units of output.

10.If market price is $40, what is the maximum profit the firm can earn?

$15

$20

$25

$30

11.If market price is $20, how many units of output will the firm produce?

0, the firm shuts down.

1

2

3

12.If the firm shouts down, its short-run loss will be

$65.

$45.

$20.

unavailable because of insufficient information.

Explanation / Answer

The Marginal cost are as follows:-

For 9 the answer is 5 units of output

For 10 the answer is the maximum profit is 25$

For 11 the answer is the firm shuts down

For 12 the answer is 20$

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