Question

Look at the table marginal analysis of sweatshirt production ii. the profit at the optimal quantity of sweatshirts is:

Answer 1

Answer: The profit at the optimal quantity will be $16.

Explanation: The producer will choose a quantity where,

MC≤MR

This happens at the 4th unit of output. So 4 units will be the optimal quantity.

$Profit= TB -TC = 64 - 48 = 16$

After the 4th unit profit starts falling. So, the producer will never choose to produce the 5th unit.