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    • 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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