Economics 0455 · IGCSE · Firms’ costs, revenue and objectives

Firms’ costs, revenue and objectives — practice question

The table presents a firm’s average revenue and average cost at various output levels. Assuming every unit produced is sold, which output level results in the greatest profit?

  • Aoutput: 5 units; average revenue: US$10; average cost: US$30
  • Boutput: 10 units; average revenue: US$20; average cost: US$20
  • Coutput: 15 units; average revenue: US$25; average cost: US$15
  • Doutput: 20 units; average revenue: US$30; average cost: US$18

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