Question

A firm sells soybeans in a perfectly competitive market. Below is a table of the total costs associated with different levels of quantity. If price is $10, how much will it produce? Quantity Total Cost 100 $ 200.00 120 $ 300.00 140 $ 500.00 150 $ 800.00 160 $ 1,200.00 Select one: a. 120 b. 140 c. 150 d. 160

Answer 1

b.)140 units

At 140 units of quantity marginal revenue = marginal cost,which will help the organisation to earn maximum profit

Quantity	cost	total revenue	marginal revenue	marginal cost
100	200	1000	-	-
120	300	1200	200	100
140	500	1400	200	200
150	800	1500	100	300
160	1200	1600	100	400

Total revenue =price x quantity

MC=MR at 140 units so 140 units should be produced to earn maximum profit