Table 14-2

-Refer to Table 14-2.At which quantity of output is marginal revenue equal to marginal cost

Question

Table 14-2
 
-Refer to Table 14-2.At which quantity of output is marginal revenue equal to marginal cost

Quizplus · Accepted Answer

At quantity 6, the marginal revenue is $60 and the marginal cost is also $60. This is the point where the firm maximizes its profit as it is producing at a quantity where the additional revenue gained from producing an additional unit is equal to the additional cost incurred for producing that unit. At quantities less than 6, the marginal revenue is greater than the marginal cost, which means the firm should produce more to increase profits. At quantities greater than 6, the marginal cost is greater than the marginal revenue, which means the firm should produce less to increase profits. Therefore, 6 is the best choice.

Table 14-2 -Refer to Table 14-2.At Which Quantity of Output Is Marginal