At which level of production does the company make the most profit? the first pair of cleats the second pair of cleats the third pair of cleats the fourth pair of cleats

The correct answer is: "the fourth pair of cleats".

Provided that this is the only information available about the company, the higher the quantity produced the larger the profits earned. The revenue earned by a firm is directly related to two variables: the price charged for the product and total number of units of the product that are sold. The higher the price charged, or the larger the quantity sold, the bigger the profits will be.

This answer could change if more details about the production process were known. For example, if factors of production (land, labor capital) are fixed and cannot be increased when there is an increase in the number of units that are produced and sold, the law of diminishing returns would operate and, when a certain level of production is exceeded, the company can even generate losses when additional units are sold.