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1.5 Perfect competition, imperfectly competitive markets and monopoly

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Question 19

A firm producing agricultural fertilizers operates in a perfectly competitive wholesale market. The table below displays the firm's average cost (AC) and marginal cost (MC) at various weekly output levels.

Output (tonnes per week)Average Cost (£)Marginal Cost (£)
207560
257172
307385
3577105
4083130

If the prevailing market price is £105 per tonne, at which of the following output levels will the firm maximize its total profit?

252525 tonnes per week

303030 tonnes per week

353535 tonnes per week

404040 tonnes per week

1.5 Perfect competition, imperfectly competitive markets and monopoly Questions

  1. A Level
  2. /Economics
  3. /1.5 Perfect competition, imperfectly competitive markets and monopoly