Question

    Using the following table. Find the profit-maximizing

    output when price is Rs 25:  
    A 3 Correct Answer Incorrect Answer
    B 4 Correct Answer Incorrect Answer
    C 5 Correct Answer Incorrect Answer
    D 6 Correct Answer Incorrect Answer
    E 7 Correct Answer Incorrect Answer

    Solution

    Profit Maximization happens where P = MC Here, P = 25. But, at q=5 units; MC = 28 which is greater than the price received. Therefore, optimal quantity produced = 4 units.

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