Use the figure below to answer the following question. Figure 12.2.4
-Refer to Figure 12.2.4.Grannie's is the only cake bakery on Coastal Island.The graph shows Grannie's demand curve,marginal revenue curve,and marginal cost curve.Grannie's profit-maximizing price is ________ a cake and its profit-maximizing output is ________ cakes a week.
A)$28;12
B)$16;12
C)$36;2
D)$16;24
E)$24;16

Question

Use the figure below to answer the following question.  Figure 12.2.4
-Refer to Figure 12.2.4.Grannie's is the only cake bakery on Coastal Island.The graph shows Grannie's demand curve,marginal revenue curve,and marginal cost curve.Grannie's profit-maximizing price is ________ a cake and its profit-maximizing output is ________ cakes a week.
A)$28;12 
B)$16;12 
C)$36;2 
D)$16;24 
E)$24;16

Quizplus · Accepted Answer

Grannie's profit-maximizing price is $28 a cake and its profit-maximizing output is 12 cakes a week. This is because the profit-maximizing price is the price at which the marginal revenue curve intersects the marginal cost curve, and the profit-maximizing output is the output at which the marginal revenue curve intersects the demand curve.

Use the Figure Below to Answer the Following Question