suppose that the demand curve for antimacassars is p = 53 - Q/1,000.The firm's profit-maximizing output is closest to
A)6,500 antimacassars.
B)13,000 antimacassars.
C)19,500 antimacassars.
D)4,290 antimacassars.
E)3,250 antimacassars.

Question

Quizplus · Accepted Answer

To find the profit-maximizing output for the firm, we need to calculate the point where marginal revenue (MR) equals marginal cost (MC).

The inverse demand function given is: 
p = 53 - Q/1,000

To find MR, we take the first derivative of the inverse demand function with respect to Q: 
MR = d(p)/d(Q) = -1/1,000

Now, we need to set MR equal to MC to find the profit-maximizing output. Let's assume that the marginal cost of producing antimacassars is constant at $5 per unit.

-1/1,000 = 5

Q = 13,000

Therefore, the firm's profit-maximizing output is 13,000 antimacassars.

Suppose That the Demand Curve for Antimacassars Is P =