characteristics as the curves that we covered in the Production, Costs and Industry Structure chapter.

FIGURE 8.2 Total Cost and Total Revenue at the Raspberry Farm Total revenue for a perfectly competitive firm is a

straight line sloping up. The slope is equal to the price of the good. Total cost also slopes up, but with some
curvature. At higher levels of output, total cost begins to slope upward more steeply because of diminishing

marginal returns. The maximum profit will occur at the quantity where the difference between total revenue and

total cost is largest.

Quantity

Total Cost

Total Revenue

(Q)

(TC)

(TR)

0

10

20

30

40

50

60

70

80

90

100

110

120

$62

$90

$110

$0

$40

$80

$126

$120

$138

$160

$150

$200

$165

$240

$190

$280

$230

$320

$296

$360

$400

$400

$550

$440

$715

$480

Profit

−$62

−$50

−$30

−$6

$22

$50

$75

$90

$90

$64

$0

$−110

$−235

TABLE 8.1 Total Cost and Total Revenue at the

Raspberry Farm
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