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 (£) |
|---|---|---|
| 20 | 75 | 60 |
| 25 | 71 | 72 |
| 30 | 73 | 85 |
| 35 | 77 | 105 |
| 40 | 83 | 130 |
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
136 exam-style questions on AQA A Level Economics 1.5 Perfect competition, imperfectly competitive markets and monopoly, covering 1.5.1 Market structures, 1.5.2 The objectives of firms, 1.5.3 Perfect competition, 1.5.4 Monopolistic competition (A-level only), 1.5.5 Oligopoly (A-level only), 1.5.6 Monopoly and monopoly power, 1.5.7 Price discrimination (A-level only), 1.5.8 The dynamics of competition and competitive market processes, 1.5.9 Contestable and non-contestable markets (A-level only), 1.5.10 Market structure, static efficiency, dynamic efficiency and resource allocation (A-level only), and 1.5.11 Consumer and producer surplus (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.