Exhibit 10-3 The profit-maximizing price for the firm in Exhibit 10-3 is

Question

Exhibit 10-3  The profit-maximizing price for the firm in Exhibit 10-3 is

Quizplus · Accepted Answer

The profit-maximizing price is where MR=MC. From the given table, we can calculate the MR as follows:
- For the first unit, MR = $60-$0 = $60
- For the second unit, MR = $50-$30 = $20
- For the third unit, MR = $40-$30 = $10
- For the fourth unit, MR = $30-$30 = $0
- For the fifth unit, MR = $20-$30 = -$10
- For the sixth unit, MR = $10-$30 = -$20

So, the profit-maximizing price is where MR=MC=$30. This happens at a quantity of 4 units, where the total cost is $120 and the total revenue is $120, resulting in a profit of $0. Therefore, the price for which the firm maximizes its profit is ($120/4)=$30 per unit, which is option C.

Exhibit 10-3 the Profit-Maximizing Price for the Firm in Exhibit