The maximum profit that the firm can attain is $?

Question

The table below shows the quantity (Q) and price (P) combinations on the firm’s demand curve.

Q	P
100	110
200	100
300	90
400	80
500	70
600	60
700	50
800	40
900	30
1000	20

 

Assume that the firm’s per-unit cost of production is $60.

At a quantity of 200, the firm’s total revenue is $20000

The firm’s profit-maximising level of output is Q = 300

The maximum profit that the firm can attain is $ ?

The firm will make a loss at all outputs of 700 and above.

Answer 1

Revenue-Cost = Profit

100*110-100*60 =5000

200*100-200*60 =8000

300*90-300*60 =9000

400*80-400*60 =8000

500*70-500*60 =5000

The maximum profit the firm can attain is $9000.