Q. You are an economic consultant for Farmer Perk, who produces raw cotton and sells it in a perfectly competitive market. One day, he provides you following cost data. Market price for a pound of cotton is $7. Use table to answer following questions.
Output
(Pounds of cotton per day) Total Fixed Cost
(TFC) Total Variable Cost
(TVC)
0 $12 $0
1 $12 $5
2 $12 $9
3 $12 $14
4 $12 $20
5 $12 $28
6 $12 $38
Illustrate what is Farmer Perk's profit-maximizing level of output?