Solved

Refer to the Data Provided in Table 9 -Refer to Table 9

Question 112

Multiple Choice

Refer to the data provided in Table 9.2 below to answer the question(s) that follow.
Table 9.2  q  TFC  TVC  TC  MC  AVC  ATC 0$50$0$50150207020207025030801015403504595151531.67450621121715.502855090140281828650132182422230.337501862365426.5733.71\begin{array} { l l l l l l l } \text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \\\hline 0 & \$ 50 & \$ 0 & \$ 50 & - - & - - & - - \\1 & 50 & 20 & 70 & 20 & 20 & 70 \\2 & 50 & 30 & 80 & 10 & 15 & 40 \\3 & 50 & 45 & 95 & 15 & 15 & 31.67 \\4 & 50 & 62 & 112 & 17 & 15.50 & 28 \\5 & 50 & 90 & 140 & 28 & 18 & 28 \\6 & 50 & 132 & 182 & 42 & 22 & 30.33 \\7 & 50 & 186 & 236 & 54 & 26.57 & 33.71 \\\hline\end{array}
-Refer to Table 9.2. The market price is $42 and this firm is producing four units of output. Which of the following would you recommend to this firm?


A) Continue producing four units of output, because the firm is able to make an economic profit.
B) Increase output to six units so that marginal cost equals marginal revenue.
C) Reduce price to $17 so that marginal cost will equal marginal revenue at 4 units of output.
D) Increase output to seven units so that price is less than marginal cost.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents