Refer to the information provided in Table 8.5 below to answer the following que

Question

Refer to the information provided in Table 8.5 below to answer the following questions. Table .5 Number of Number of TEC TVC TC MC Fruit Baskets 0 $100 S0 $100 100 20 120 20 100 30 130 10 100 42 142 12 100 62 162 20 100 92 192 30 6 100 136 236 44 4 9) Refer to Table 8.5. Assume that Polynesian Fruit sells fruit baskets in a perfectly competitive market. The market price of a fruit basket is $44. To maximize profits, Polynesian Fruit should sellLO A) three; $10 B) four; $14 C) five; $28 D) six; $28 fruit baskets and their profit is ,

Explanation / Answer

for perfectly competitive firm

P = MC

P = 44 given

at Q = 6

P = MC = 44

so Q = 6 is the profit maximising output therefore firm would sell 6 units of fruit baskets

Profit = TR - TC

= PQ - TC

= 44(6) - 236

= 264 -236

= 28

option D is correct

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