A profit-maximizing firm in a competitive market is able to sell its product for $8.At its current level of output the firm's average total cost is $11.Its marginal-cost curve crosses the marginal revenue curve at an output level of 10 units.At that point,what does the firm experience

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Quizplus · Accepted Answer

At an output level of 10 units, the firm's marginal cost is equal to its marginal revenue, which is $8. Therefore, each unit sold at this level adds $8 to the firm's revenue, while the cost of producing each additional unit is $11. This means that the firm is losing $3 on each unit it produces and sells. Since it is producing 10 units, its total loss is $3 * 10 = $30. Therefore, the best choice is B, a loss of exactly $30.

A Profit-Maximizing Firm in a Competitive Market Is Able to Sell