example, at Q = 60, TR = 240 and TC = 165. The difference is 75, which is the height of the profit curve at that

output level. The firm doesn’t make a profit at every level of output. In this example, total costs will exceed total

revenues at output levels from 0 to approximately 30, and so over this range of output, the firm will be making

losses. At output levels from 40 to 100, total revenues exceed total costs, so the firm is earning profits.

However, at any output greater than 100, total costs again exceed total revenues and the firm is making

increasing losses. Total profits appear in the final column of Table 8.1. Maximum profit occurs at an output

between 70 and 80, when profit equals $90.

A higher price would mean that total revenue would be higher for every quantity sold. A lower price would

mean that total revenue would be lower for every quantity sold. What happens if the price drops low enough so
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