Table 14-8
Suppose that a firm in a competitive market faces the following revenues and costs:

-Refer to Table 14-8.In order to maximize profits,the firm will produce

Question

Table 14-8
Suppose that a firm in a competitive market faces the following revenues and costs:
 
-Refer to Table 14-8.In order to maximize profits,the firm will produce

Quizplus · Accepted Answer

The firm will produce where marginal revenue (MR) equals marginal cost (MC) in order to maximize profits. In this case, that occurs at a quantity of 6 units of output, where MR = MC = $16. At any quantity greater or smaller than 6, the firm's profits will be lower. Therefore, the best choice is to produce 6 units of output.

Table 14-8 Suppose That a Firm in a Competitive Market Faces the Faces