Use the figure to answer the following question(s).
Figure 9-9

If the market price in Figure 9-9 increases to $60, what should the firm do?
A) produce 10 per day
B) produce 15 per day
C) produce 20 per day
D) increase its price to $70

Question

Use the figure to answer the following question(s).
Figure 9-9

If the market price in Figure 9-9 increases to $60, what should the firm do?
A) produce 10 per day 
B) produce 15 per day 
C) produce 20 per day 
D) increase its price to $70

Quizplus · Accepted Answer

At a market price of $60, the firm's marginal revenue (MR) is equal to $40, which is the point of intersection between the $60 price line and the MR curve. At this point, the firm should produce the quantity where MR equals marginal cost (MC), which is 20 units per day. Therefore, the firm should produce 20 units per day.

Use the Figure to Answer the Following Question(s)