A firm makes insulated lunch bags. Table 1 shows four possible monthly output levels. At each output level, every bag produced is sold at the price shown. The firm currently produces 3,600 bags a month.
| Output (bags) | Price per bag (£) | Average cost (£) |
|---|---|---|
| 1,200 | 18.00 | 14.50 |
| 2,000 | 16.00 | 12.80 |
| 2,800 | 14.50 | 12.40 |
| 3,600 | 13.00 | 12.10 |
Using Table 1, calculate the change in the firm's monthly total profit if it moves from its current output to the output level that gives the greatest total profit. Show your working.
138 exam-style questions on AQA GCSE Economics 1.4 Production, costs, revenue and profit, covering 1.4.1a Business objectives, 1.4.1b Types of costs and revenue, 1.4.1c Calculating profit, 1.4.1d Profit as an incentive to produce, 1.4.1e Moral and ethical considerations, 1.4.2a Production versus productivity, 1.4.2b Factors and benefits of productivity, 1.4.3a Economies of scale and business behaviour, 1.4.3b Types of economy of scale, and 1.4.3c Diseconomies of scale. Each one has a worked solution and a mark scheme showing where the marks go.