The profit-maximizing/loss-minimizing level of outputA) 50.B) 80.C) 100.D) 120.

Question

Darius Lamar · Accepted Answer

Final Answer : C, Explanation :  The profit-maximizing or loss-minimizing level of output is where Marginal Cost (MC) = Marginal Revenue (MR). From the given table, we can calculate MC and MR for different output levels as:| Output (Q) | MC | MR || ---------- | -- | -- || 20         | 30 | 70 || 40         | 40 | 50 || 60         | 60 | 30 || 80         | 90 | 10 || 100        | 130| -10|| 120        | 180| -30|So, we can see that MC=MR at Q=100. At this level of output, the firm's total revenue will be ($100 x $70) = $7000 and total cost will be ($130 x 100) = $13,000, resulting in a loss of $6000 which is the least amount of loss among all other output levels. Therefore, the best choice is to produce 100 units to minimize the loss.

The profit-maximizing/loss-minimizing level of output

A) 50.
B) 80.
C) 100.
D) 120.

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