The marginal revenue (MR) for a firm is a constant $45, and the firm's marginal cost (MC) is given by MC = 1.5Q (where Q is quantity of output). What is the firm's profit-maximizing level of output?
A) 67.5
B) 30
C) 45
D) 15

Question

Quizplus · Accepted Answer

To find the profit-maximizing level of output, we need to set the MR equal to MC:
MR = MC
$45 = 1.5Q
Q = 30
Therefore, the firm's profit-maximizing level of output is 30.

The Marginal Revenue (MR) for a Firm Is a Constant