Sweatshop P/L produces denim shirts. Sweatshop is a price taker and must decide on its hourly production rate. The costs of production are:

92

(only completed shirts are counted)

If the price of shirts is $25 – per shirt, Sweatshop ‘s profit maximizing production rate is:

A. 2 shirts per hour

B. 3 shirts per hour

C. 4 shirts per hour

D. 5 shirts per hour  

Explain your answer.