Figure 10-1
Given the cost and demand conditions in Figure 10-1, what price should this competitive price-searcher firm charge in order to maximize profits?

Question

Figure 10-1 
Given the cost and demand conditions in Figure 10-1, what price should this competitive price-searcher firm charge in order to maximize profits?

Quizplus · Accepted Answer

The profit-maximizing price for a competitive price-searcher firm is where marginal revenue (MR) equals marginal cost (MC), which occurs at point A in the graph. Point A corresponds to a price of P $14 and a quantity of Q 55. This price allows the firm to capture a portion of the consumer surplus, resulting in economic profits. Therefore, the correct choice is D.

Figure 10-1 Given the Cost and Demand Conditions in Figure 10-1, What