Table 13-4

Table 13-4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company. Victoria sells plastic vials to universities and private research laboratories.
-Refer to Table 13-4.Victoria's profit-maximizing output is where
A)total profit equals $3.
B)marginal revenue and marginal cost both equal $4.
C)marginal revenue and marginal cost both equal $3.
D)marginal cost is at its minimum value.

Question

Table 13-4
  
Table 13-4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company. Victoria sells plastic vials to universities and private research laboratories.
-Refer to Table 13-4.Victoria's profit-maximizing output is where
A)total profit equals $3. 
B)marginal revenue and marginal cost both equal $4. 
C)marginal revenue and marginal cost both equal $3. 
D)marginal cost is at its minimum value.

Quizplus · Accepted Answer

To maximize profit, a firm sets its output where marginal revenue equals marginal cost. In this case, the point where these two values are equal is at an output of 300 boxes. At this output level, both marginal revenue and marginal cost are equal to $3. Therefore, the correct answer is C.

Table 13-4 Table 13-4 Lists Estimated Revenues and Costs (Per Week)for Plastic