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According to Table 8.1 in the source, at which output level does the raspberry farm earn its highest total profit, and how much is that profit?
AAn output of 70 to 80 units, with a profit of $56
BAn output of 100 units, with a profit of $56
CAn output of 0 units, with a profit of $62
DAn output of 50 units, with a profit of $34
Answer & Solution
Correct answer: A. An output of 70 to 80 units, with a profit of $56
1. Table 8.1 lists profit at each output level from 0 to 100 units.
2. The highest profit figure in the table is $56, occurring at both 70 and 80 units of output.
3. At 100 units the farm is actually posting a small loss, not the highest profit, so that option is wrong.
4. At 0 units the farm loses its entire $62 in fixed costs, which is not a profit at all.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 8 "Perfect Competition", section 8.2 | How Perfectly Competitive Firms Make Output Decisions_
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