Table 14-2

-Refer to Table 14-2.If the firm finds that its marginal cost is $8,what should it do

Question

Table 14-2
 
-Refer to Table 14-2.If the firm finds that its marginal cost is $8,what should it do

Quizplus · Accepted Answer

According to the table, the profit maximizing level of output is where Marginal Cost (MC) equals Marginal Revenue (MR), which occurs at a quantity of 4 units. At a marginal cost of $8, the firm's MC is still below the MR and it can increase its production to maximize profits. As a result, the firm should choose to increase production (Option B) to achieve maximum profit.

Table 14-2 -Refer to Table 14-2.If the Firm Finds That Its Marginal