Refer to the following figure:

The graph shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MR T , and marginal cost.
-What total output should the firm produce?
A) 275 units
B) 225 units
C) 175 units
D) 350 units
E) 100 units

Question

Refer to the following figure:
  
The graph shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MR T , and marginal cost.
-What total output should the firm produce?
A) 275 units 
B) 225 units 
C) 175 units 
D) 350 units 
E) 100 units

Quizplus · Accepted Answer

The optimal output level for a firm is typically where marginal cost equals marginal revenue. Without additional information, 225 units is often a reasonable estimate for a mid-range production level.

Refer to the Following Figure