1. At which production level there will be no profit or loss to the producer? 2. Comment on the profit and loss conditions as TC 1000 and TR750.

Question

Consider the following table

Out put	TFC	TVC	TC	Price	TR
0	500	....	500	15	....
50	500	500	1000	15	750
100	500	1000	1500	15	1500
200	500	2000	2500	15	3000

1. At which production level there will be no profit or loss to the producer?

2. Comment on the profit and loss conditions as TC 1000 and TR750.

Answer 1

1. At the production level of 100 units of output, the producer incurs 1500 TC and 1500 TR. So there will be no profit or loss to the producer 

2. When TC =1000 

TR = 750 

Loss = TC-TR 

= 1000-750 = 250