1. A firm in a competitive market has the following cost structure: Output Total Costs 0 $10 1 $12 2 $15 3 $19 4 $24 5 $30 6 $37 7 $46 8 $55 9 $65 If the market price is $8, how many units should the firm produce to maximize profit? a. 5 units b. 6 units c. 7 units d. 8 units

b. 6 units

Explanation:

Output     Revenue  Costs=Profit  ( Revenue - Costs)

   0                   0         10=  -10

   1                    8         12=  -4

   2                   16        15=   1

   3                   24        19=   5

   4                   32        24=   8

   5                   40        30=   10

   6                   48         37=   11

   7                   56        46=   10

   8                   64        55=   9

   9                   72        65=    7  

Note: The revenue is calculated by multiplying output by the market price of $8.

The firm should produce 6 units to maximize their profit which is $11.

answer; ///i believe the correct answer is (c) laissez-faire;

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