The following are marginal cost curves for selling chicken in a Mom & Pop (MC_M) store and in a Big-Box retailer (MC_B). MC_M = 2 + 2Q_M MC_B = 4 + Q_B If the price of a chicken is $12, how many chickens does each store supply? A) Mom & Pop: 5; Big-Box: 8 B) Mom & Pop: 1; Big-Box: 1 C) Mom & Pop: 26; Big-Box: 20 D) Mom & Pop: 8; Big-Box: 8

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Quizplus · Accepted Answer

The profit-maximizing quantity is where marginal cost equals price. For Mom & Pop: 2+2Q_M=12 2Q_M=10 Q_M=5 For Big-Box: 4+Q_B=12 Q_B=8 Therefore, Mom & Pop sells 5 chickens and Big-Box sells 8 chickens at a price of $12.

The Following Are Marginal Cost Curves for Selling Chicken in a Mom