Question

The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good.

Quantity Sold	TR	TC	Profit
0	0	5
1	5	7
2	10	10
3	15	12
4	20	15
5	25	23
6	30	33
7	35	40

Answer 1

Quantity Sold	TR	TC	Profit	AR = TR/Q
0	0	5	0 - 5	-
1	5	7	5 -7 = - 2	5/1 = 5
2	10	10	10 - 10 = 0	10/2 = 5
3	15	12	15 - 12 = 3	15/3 = 5
4	20	15	20 - 15 = 5	20/4 = 5
5	25	23	25 - 23 = 2	25/5 = 5
6	30	33	30 - 33 = - 3	30/6 = 5
7	35	40	35 - 40 = -5	35/7 = 5