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 |