The next six questions 11–16 are based on the following table which gives the variable cost of producing the different levels of output of a commodity that a competitive firm might produce :
| Output | Variable Cost of Production |
|---|---|
| 0 | 0 |
| 1 | 25 |
| 2 | 42 |
| 3 | 54 |
| 4 | 64 |
| 5 | 75 |
| 6 | 93 |
| 7 | 112 |
| 8 | 140 |
| 9 | 180 |
| 10 | 230 |
The sunk cost of production in the short run is 15.
If the price of the commodity is 14, then the profit-maximizing level of output is
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Perfect competition has come up 115 times in 7 exams since 2006.
This question is on Profit maximisation and the competitive firm, part of Perfect competition in Microeconomics.
How a price-taking firm picks output where price equals marginal cost, and when it breaks even or shuts down.
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Question from the JNU SSS 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.