Figure 7.4
-Using Figure 7.4, the profit maximizing output and price for this firm is

Question

Quizplus · Accepted Answer

The profit-maximizing output is where marginal cost equals marginal revenue. From the graph, we can see that this occurs at an output of 160 units. The profit-maximizing price is then found by adding the marginal cost to the marginal revenue at the profit-maximizing output. From the graph, we can see that the marginal cost at an output of 160 units is $13, and the marginal revenue is $3. Therefore, the profit-maximizing price is $13 + $3 = $16.

Figure 7.4 -Using Figure 7.4, the Profit Maximizing Output and Price for Price