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    Determine the amount of profit or loss

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    Johnston production is a price taker that utilizes this cost structure in the short run:

    Output Marginal Cost
    1 $10
    2 $5
    3 $12
    4 $23
    5 $40

    Johnston Production's fixed cost is $20 and the market price of each product sold is $25. Determine the output level that Johnston production should use for maximizing profit. Determine the amount of profit or loss that Johnston production will experience in the short run.

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    https://brainmass.com/economics/perfect-competition/determine-the-amount-of-profit-or-loss-408276

    Solution Preview

    At 4 units, the total cost incurred will be $20 (Fixed Cost) + )$10+$5+$12+ $23)= $70. The total ...

    Solution Summary

    Johnston Production's fixed cost is $20 and the market price of each product sold is $25. Determine the output level that Johnston production should use for maximizing profit. Determine the amount of profit or loss that Johnston production will experience in the short run.

    $2.19