Johnston production is the price taker which 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.