Table 17-3
Traci's Hairstyling is one salon among many in the market for hairstyling. The following table presents cost and revenue data for Traci's Hairstyling.

-Refer to Table 17-3.If the government required Traci's to produce at the efficient scale of output,how many hair treatments would Traci's sell?

Question

Table 17-3
Traci's Hairstyling is one salon among many in the market for hairstyling. The following table presents cost and revenue data for Traci's Hairstyling.
 
-Refer to Table 17-3.If the government required Traci's to produce at the efficient scale of output,how many hair treatments would Traci's sell?

Quizplus · Accepted Answer

To produce at the efficient scale of output, Traci's should produce where marginal cost (MC) equals marginal revenue (MR). From the table, we can see that MC is at its lowest at 4 treatments, while MR equals MC at 5 treatments. Therefore, Traci's should produce either 4 or 5 hair treatments to be at the efficient scale of output. The only choice that includes both options is choice B.

Table 17-3 Traci's Hairstyling Is One Salon Among Many in the Market