Refer to the following table which gives the demand and cost data for a price-setting firm: $\begin{array}{rrc}
\text { Price } & \text { Output } & \text { Total Cost } \
\hline \$ 20 & 7 & \$ 36 \
19 & 8 & 45 \
18 & 9 & 54 \
17 & 10 & 63 \
16 & 11 & 72 \
15 & 12 & 81
\end{array}$
What is the profit-maximizing price?

Question

Refer to the following table which gives the demand and cost data for a price-setting firm: $\begin{array}{rrc}
\text { Price } & \text { Output } & \text { Total Cost } \
\hline \$ 20 & 7 & \$ 36 \
19 & 8 & 45 \
18 & 9 & 54 \
17 & 10 & 63 \
16 & 11 & 72 \
15 & 12 & 81
\end{array}$
 What is the profit-maximizing price?

Quizplus · Accepted Answer

The profit-maximizing price is where marginal revenue equals marginal cost. Calculate profit for each price and choose the highest: At $18, profit is $108 - $54 = $54, which is the highest.

Refer to the Following Table Which Gives the Demand and Cost