The table bellow shows the relationship between total cost and output for a firm in a perfectly competitive market.
The firm sells its product for €7 per unit.
I was told to answer the following question: if the firm seeks to maximize profit at which level of output should it operate?
I’m aware that profit reaches its maximum where marginal cost equals marginal revenue. I also know that, for a perfectly competitive firm, marginal revenue is equal to price.
So I came up with this:
The optimal solution lies between 100 and 200, but can I actually find out the exact level of output where profit is maximized?