Table 17-1

-Refer to Table 17-1.This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm.What price will this firm charge to maximize profit?

Question

Table 17-1
 
-Refer to Table 17-1.This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm.What price will this firm charge to maximize profit?

Quizplus · Accepted Answer

The firm will maximize its profit where marginal revenue (MR) equals marginal cost (MC). In this case, at the $8 price, the quantity demanded is 8. At this point, MC equals MR ($8), indicating profit maximization. At a higher or lower price, the firm will not maximize its profit. Therefore, the correct answer is C) $8.

Table 17-1 -Refer to Table 17-1.This Table Shows the Demand Schedule,marginal Cost,and