Reference: Ref 11-2(Table: Barrels of Oil) Refer to the table. How many barrels of oilshould the company produce to maximize profit?
A)6
B)7
C)8
D)9

Question

Reference: Ref 11-2(Table: Barrels of Oil) Refer to the table. How many barrels of oilshould the company produce to maximize profit?
A)6 
B)7 
C)8 
D)9

Quizplus · Accepted Answer

The company should produce 8 barrels of oil to maximize profit as it is where the marginal revenue equals the marginal cost, leading to the highest profit point. At 8 barrels, the marginal revenue is $36 and the marginal cost is $28, resulting in a profit of $8 per barrel. Producing more or less than 8 barrels would result in a lower profit margin.

Reference: Ref 11-2(Table: Barrels of Oil) Refer to the Table