Use the table below to answer the following questions.
Table 12.2.2

-Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm. If the price of a pizza is $7, what is Chip's profit-maximizing output per hour?

Question

Use the table below to answer the following questions.
Table 12.2.2
 
-Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm. If the price of a pizza is $7, what is Chip's profit-maximizing output per hour?

Quizplus · Accepted Answer

In a perfectly competitive market, the profit-maximizing output is where marginal cost (MC) equals marginal revenue (MR), which is the price. If the price is $7, Chip should produce where MC is closest to $7 without exceeding it.

Use the Table Below to Answer the Following Questions