Profit Calculation from Total Revenue and Costs

Steps:

• Calculate total revenue (TR) at 20 units: 20 × $6 =$120.
• Identify total cost (TC) at 20 units: $120.
• Compute profit: TR - TC = $120 -$120 = $0, meaning no profit.
• Verify other options using cost data: fixed costs evident at $40 (TC at 0 output); average costs (AC = TC/output) are$10 at 10 units, 5 at 30 (lowest at 30); variable costs (VC = TC - 0 to 80, $110.

Why B is correct:

• Profit is total revenue minus total cost; at 20 units, TR equals TC ($120), so profit is zero per the profit formula.

Why the others are wrong:

• A: AC falls from $10 at 10 units to$5 at 30 units, so lowest at 30 units.
• C: Fixed costs are $40, as TC at zero output is$40.
• D: VC increases from $60at10u$110 at 30 units.

Final answer: B