Table: Three Firms $$\begin{array} { l c }
\hline \text { Firm } & \text { Quantity Produced } \
\hline \text { Firm 1 } & 100 \
\text { Firm 2 } & 80 \
\text { Firm 3 } & 50 \
\hline
\end{array}$$ This table provides information on three firms in a competitive industry where the market price is $39; therefore, at these production levels:
A) Firm 1's marginal cost exceeds Firm 3's marginal cost.
B) Firm 2's marginal cost is $39.
C) the marginal cost curves for all three firms are identical.
D) the total cost of production is maximized by all three firms.

Question

Table: Three Firms $$\begin{array} { l c } 
\hline \text { Firm } & \text { Quantity Produced } \
\hline \text { Firm 1 } & 100 \
\text { Firm 2 } & 80 \
\text { Firm 3 } & 50 \
\hline
\end{array}$$ This table provides information on three firms in a competitive industry where the market price is $39; therefore, at these production levels:
A) Firm 1's marginal cost exceeds Firm 3's marginal cost.
B) Firm 2's marginal cost is $39.
C) the marginal cost curves for all three firms are identical.
D) the total cost of production is maximized by all three firms.

Quizplus · Accepted Answer

In a competitive market, firms produce where marginal cost equals market price. Therefore, Firm 2's marginal cost is $39.

Table: Three Firms This Table Provides Information on Three Firms in a Competitive