Answer the question on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10: $1$40227329431538\begin{array} { c r } \text { Output } & \text { ATC } \\\hline 1 & \$ 40 \\2 & 27 \\3 & 29 \\4 & 31 \\5 & 38\end{array}$ Refer to the data.The profit-maximizing level of output for this firm:

A) is 3.
B) is 4.
C) is 5.
D) cannot be determined from the information given.

Question

Answer the question on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10:

1$40227329431538\begin{array} { c r } \text { Output } & \text { ATC } \\\hline 1 & \$ 40 \\2 & 27 \\3 & 29 \\4 & 31 \\5 & 38\end{array}

Refer to the data.The profit-maximizing level of output for this firm:

A) is 3.
B) is 4.
C) is 5.
D) cannot be determined from the information given.

Reagan Townsend · Accepted Answer

Final Answer : D, Explanation :  The profit-maximizing level of output cannot be determined solely from the average total costs (ATC) without information on the selling price per unit or the marginal costs and revenues.

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