The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.
Output | TC (Rs) |
0 | 5 |
1 | 15 |
2 | 22 |
3 | 27 |
4 | 31 |
5 | 38 |
6 | 49 |
7 | 63 |
8 | 81 |
9 | 101 |
10 | 123 |
Output | Price (P) | TC (Rs) | TR (Rs) = P X Output | Profit = TR – TC |
0 | 10 | 5 | 0 | - 5 |
1 | 10 | 15 | 10 | - 5 |
2 | 10 | 22 | 20 | - 2 |
3 | 10 | 27 | 30 | 3 |
4 | 10 | 31 | 40 | 9 |
5 | 10 | 38 | 50 | 12 |
6 | 10 | 49 | 60 | 11 |
7 | 10 | 63 | 70 | 7 |
8 | 10 | 81 | 80 | - 1 |
9 | 10 | 101 | 90 | - 11 |
10 | 10 | 123 | 100 | - 23 |
The profit maximising level of output is 5 units, where profit is maximum of Rs 12.