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The following table shows the total cost...

The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs. 10. Calculate the profit at each output level. Find the profit maximizing level of output.

Text Solution

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Profit = TR - TC.
The producer achieves equilibrium at 5 units of output. It is because this level of output satisfies both the conditions of producer's equilibrium.
The difference between TR and TC is positive and maximum.
Total profits fall after 5 units of output.
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