If the market price was $9.50, how many units should the perfectly competitive firm depicted below produce in order to maximize profits? $$\begin{array} { l l }
\text { Quantity } & \text { Total Cost } \
\hline 10 & \$ 50.00 \
11 & \$ 57.00 \
12 & \$ 66.00 \
13 & \$ 7.00 \
14 & \$ 90.00
\end{array}$$

Question

If the market price was $9.50, how many units should the perfectly competitive firm depicted below produce in order to maximize profits? $$\begin{array} { l l } 
\text { Quantity } & \text { Total Cost } \
\hline 10 & \$ 50.00 \
11 & \$ 57.00 \
12 & \$ 66.00 \
13 & \$ 7.00 \
14 & \$ 90.00
\end{array}$$

Quizplus · Accepted Answer

To maximize profits, the firm should produce where marginal cost (MC) equals the market price. Calculate MC for each additional unit and compare it to the market price of $9.50. The MC for producing the 12th unit is $9.00, which is closest to the market price without exceeding it.

If the Market Price Was $9 A)10 B)11 C)12 D)13 E)14

If the Market Price Was $9 A)10
B)11
C)12
D)13
E)14