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Refer to the table below ||Rate of Output||Fixed Costs||Variable Costs||Total Costs||Average...

Question:

Refer to the table below

Rate of OutputFixed CostsVariable CostsTotal CostsAverage Total Costs
01200120
101208520520.5
1512012524516.33
2012015027013.5
3012024036012.00
4012035047011.75
5012055067013.40
5112063375314.76

Compute total profits at a price of $35 per unit and an output of

a. 40 units

b. 50 units

Profit Maximization

Profit maximization is the belief that firms control output and price levels to achieve a point where they maximize revenues. Profit is equal to total revenues minus total costs. Profit maximization is equal to marginal revenue minus marginal cost. The profit maximization point is where any changes in output or prices decreases the firms profits.

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Profit Maximization: Definition, Equation & Theory

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Chapter 24 / Lesson 6
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Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.


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