Suppose That the Total Fixed Cost for a Guitar Manufacturer

Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
-Refer to the information above to answer this question.If the manufacturer can sell her guitars for $70,what will be her profit or loss at the optimal output?

A) She will break even.
B) A loss of $50.
C) A profit of $50.
D) A loss of $60.
E) A loss of $90.

Correct Answer:

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