Exhibit 7-17 Marginal revenue and cost per unit curves

-In Exhibit 7-17,if the price of the firm's product is $20 per unit,the firm will produce:

Question

Exhibit 7-17 Marginal revenue and cost per unit curves
 
-In Exhibit 7-17,if the price of the firm's product is $20 per unit,the firm will produce:

Quizplus · Accepted Answer

When the price of the product is $20 per unit, the firm should produce the quantity where marginal cost equals marginal revenue. Looking at the graph, we can see that the marginal cost curve intersects the marginal revenue curve at a quantity of 60 units. At this quantity, the firm will be able to maximize their profit. Producing more or less than 60 units will result in a lower profit. Therefore, the best choice is 60 units per day.

Exhibit 7-17 Marginal Revenue and Cost Per Unit Curves