What level of output maximizes profit?

ABC, Incorporated has a local monopoly in the sale of automatic paper towel dispensers. The table below shows the demand for these towel dispensers at various prices. The total cost of production of the various levels of output is also shown. (15 points)

· Calculate total revenue and profit for the firm.

· What level of output maximizes profit?

· What price should the firm charge?

Quantity Price Total Revenue Total

Cost

Profit
0 $100 $80
1 85 100
2 70 125
3 55 155
4 40 190
5 25 230
 
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