Table 14-6
Suppose that a firm in a competitive market faces the following revenues and costs:

$$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c }
\text { Total Revenue } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { (Dollars) }
\end{array} \
\hline 0 & 0 & 3 \
\hline 1 & 6 & 5 \
\hline 2 & 12 & 8 \
\hline 3 & 18 & 12 \
\hline 4 & 24 & 17 \
\hline 5 & 30 & 23 \
\hline 6 & 36 & 30 \
\hline 7 & 42 & 38 \
\hline
\end{array}$$
-Refer to Table 14-6. The firm will produce a quantity greater than three because at 3 units of output, marginal cost

Question

Table 14-6
Suppose that a firm in a competitive market faces the following revenues and costs:
​
​
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Total Revenue } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (Dollars) }
\end{array} \
\hline 0 & 0 & 3 \
\hline 1 & 6 & 5 \
\hline 2 & 12 & 8 \
\hline 3 & 18 & 12 \
\hline 4 & 24 & 17 \
\hline 5 & 30 & 23 \
\hline 6 & 36 & 30 \
\hline 7 & 42 & 38 \
\hline
\end{array}$$ ​
-Refer to Table 14-6. The firm will produce a quantity greater than three because at 3 units of output, marginal cost

Quizplus · Accepted Answer

At 3 units of output, the marginal cost of producing an additional unit (the cost of going from 3 to 4 units) is less than the marginal revenue gained from selling that additional unit, indicating that it is profitable for the firm to produce more than 3 units.

Table 14-6 Suppose That a Firm in a Competitive Market

Table 14-6
Suppose That a Firm in a Competitive Market