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Question
Table 12-3| Quantity | Total Cost | Average Total Cost | Marginal Cost |
| 0 | $10.00 | ----- | ----- |
| 1 | 15.00 | $15.00 | $5.00 |
| 2 | 17.50 | 8.75 | 2.50 |
| 3 | 22.50 | 7.50 | 5.00 |
| 4 | 30.00 | 7.50 | 7.50 |
| 5 | 40.00 | 8.00 | 10.00 |
| 6 | 52.50 | 8.75 | 12.50 |
| 7 | 67.50 | 9.64 | 15.00 |
| 8 | 85.00 | 10.63 | 17.50 |
| 9 | 105.00 | 11.67 | 20.00 |
Arnie sells basketballs in a perfectly competitive market. Table 12-3 summarizes Arnie's output per day (Q), total cost (TC), average total cost (ATC) and marginal cost (MC).
Refer to Table 12-3. What price (P) will Arnie charge and how much profit will he earn if the market price of basketballs is $12.50?
A) Price and profit cannot be determined from the information given.
B) P = $12.50; profit = $52.50
C) P = $12.50; profit = $22.50
D) P = $20; profit = $75.00.
Answer
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