Fresh Laundry is a firm that produces laundry detergent. The table above summarizes Fresh Laundry's product quality marg revenue and marginal cost at various quality levels.
-Refer to the table above. What is the profit- maximizing number of quality units for Fresh Laundry to produce?

Question

Quizplus · Accepted Answer

The profit-maximizing quantity for Fresh Laundry to produce is where marginal revenue (MR) equals marginal cost (MC). Looking at the table, we can see that the point where MR and MC intersect is at a quality level of 8. At this level, Fresh Laundry can charge a price of $12 per unit, and produce 8 units at a marginal cost of $8 per unit. This results in a profit of $32 per unit, which is higher than any other quality level. Therefore, choice C is the best choice for Fresh Laundry to maximize profits.

Fresh Laundry Is a Firm That Produces Laundry Detergent