Fig. 1 shows the total revenue and total cost curves for a firm selling refill containers. The market price remains at $6 per container. Output (containers)...

(a) Total revenue is price multiplied by quantity sold. At a constant price of $6 and output of 600 containers:

\[TR=600\times\$6=\$3600\]

Total revenue is $3600 [2].

(b) Break-even occurs where total revenue equals total cost, so profit is zero. The two curves meet at 200 containers [1]. At that output, TR equals TC [1], hence profit is zero [1].

(c) At 800 containers, Fig. 1 gives total revenue of $4800 and total cost of $4200:

\[\text{Profit}=TR-TC=\$4800-\$4200=\$600\]

The firm makes $600 profit [4].

(d) The decision depends on the objective. At 600 containers, total revenue is $3600 and total cost is $3000, so:

\[\text{Profit at 600}=\$3600-\$3000=\$600\]

At 800 containers, profit is also $600. Therefore, increasing output does not increase profit [2]. Over this range, revenue rises by $1200 and costs also rise by $1200, so the extra output adds no extra profit [1]. Producing more could also create capacity, coordination or quality pressures [1].

However, the firm might still raise output to serve more consumers or protect market share [1]. Overall, it should not increase output solely to increase profit, but it may do so if it has a non-profit objective such as maintaining market share [1]. A key examination habit is to compare profit at both outputs, rather than assuming that a higher output must mean higher profit.