Economics 2281 · O Level · 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. If all output is sold, which output level produces the highest 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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