Table 17-2

-Refer to Table 17-2.This table shows the demand schedule,marginal cost,and average cost for a monopolistically competitive firm.What price should this firm charge to maximize profit?

Question

Table 17-2
 
-Refer to Table 17-2.This table shows the demand schedule,marginal cost,and average cost for a monopolistically competitive firm.What price should this firm charge to maximize profit?

Quizplus · Accepted Answer

In order to maximize profit, the firm should set its price at the point where MR=MC. Looking at the table, we can see that the marginal revenue (MR) for a price of $12 is $8, which is equal to the marginal cost (MC) of producing the 20th unit. Therefore, the firm should charge a price of $12 to maximize profit.

Table 17-2 -Refer to Table 17-2.This Table Shows the Demand Schedule,marginal Cost,and