Figure 5.1 Cost and Demand Conditions of a Perfectly Competitive Firm

-Refer to Figure 5.1. The firm will maximize total economic profits by producing
A) 40 units
B) 50 units
C) 60 units
D) 75 units

Question

Figure 5.1 Cost and Demand Conditions of a Perfectly Competitive Firm
 
-Refer to Figure 5.1. The firm will maximize total economic profits by producing
A) 40 units 
B) 50 units 
C) 60 units 
D) 75 units

Quizplus · Accepted Answer

The firm will maximize total economic profits by producing at the quantity where marginal cost (MC) equals marginal revenue (MR). Without the specific details from Figure 5.1, the correct answer typically aligns with this principle of microeconomics. Assuming the correct choice reflects this principle, and given the options, the choice provided as correct would be based on the assumption that at 60 units, MC equals MR, which is the profit-maximizing condition according to economic theory.

Figure 51 Cost and Demand Conditions of a Perfectly Competitive Firm