Figure 13-8

Figure 13-8 shows cost and demand curves for a monopolistically competitive producer of iced tea.
-Refer to Figure 13-8.What is the profit-maximizing output level?
A)22 cases
B)24 cases
C)30 cases
D)38 cases

Question

Figure 13-8
  
Figure 13-8 shows cost and demand curves for a monopolistically competitive producer of iced tea.
-Refer to Figure 13-8.What is the profit-maximizing output level?
A)22 cases 
B)24 cases 
C)30 cases 
D)38 cases

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal cost equals marginal revenue. In this case, marginal cost is $12 and marginal revenue is $14. Therefore, the profit-maximizing output level is 22 cases.

Figure 13-8 Figure 13-8 Shows Cost and Demand Curves for a Monopolistically