Exhibit 23-3

-Refer to Exhibit 23-3.What quantity of output should the profit-maximizing firm produce?

Question

Exhibit 23-3
 
-Refer to Exhibit 23-3.What quantity of output should the profit-maximizing firm produce?

Quizplus · Accepted Answer

The profit-maximizing firm should produce the quantity where marginal revenue (MR) equals marginal cost (MC). In this case, MR intersects MC at a quantity of 44 units, which is the profit-maximizing output level. At this output level, the firm can sell each unit for a price of $71 and produce each unit at a cost of $67, resulting in a profit of $4 per unit. Therefore, producing 44 units will yield the highest profit for the firm.

Exhibit 23-3 -Refer to Exhibit 23-3.What Quantity of Output Should the Profit-Maximizing