The table shown below gives the short-run total cost function Noel's window cleaning firm. This firm competes in a perfectly competitive market.

Number Of Jobs Completed Total Costs in $$

0 30

1 37

2 48

3 65

4 92

5 129

6 169

Noel's firm charges the market price for window washing jobs, $30/job. At what output will the firm maximize profit? What will that profit be?

profit maximizing output is 4; $28

Explanation:

Noel's firm charges the market price for window washing jobs = $30/job

Marginal cost for the 5th unit of output:

= Total cost from 5th unit - Total cost from 4th unit

= $129 - $92

= $37

At 5th level of output, the marginal cost is greater than the market price for window washing jobs.

Therefore, the profit maximizing output is 4.

Profit = (market price * output) - Total cost

= ($30 * 4) - 92

= $120 - $92

= $28