Figure 14-1

-Refer to Figure 14-1.When price is equal to P₃,at what level of output will the profit-maximizing firm produce

Question

Figure 14-1
 
-Refer to Figure 14-1.When price is equal to P₃,at what level of output will the profit-maximizing firm produce

Quizplus · Accepted Answer

At price P₃, the firm's marginal revenue, MR, equals its marginal cost, MC, and the firm will produce the quantity of output where MR=MC in order to maximize profits. In this case, at MR=MC, the level of output is Q₃. Therefore, the answer is C.

Figure 14-1 -Refer to Figure 14-1.When Price Is Equal to P₃,at What