Exhibit 7-17 Marginal revenue and cost per unit curves

-As shown in Exhibit 7-17,the price at which the firm earns zero economic profit in the short-run is:

Question

Exhibit 7-17 Marginal revenue and cost per unit curves
 
-As shown in Exhibit 7-17,the price at which the firm earns zero economic profit in the short-run is:

Quizplus · Accepted Answer

The point where the marginal revenue curve intersects with the marginal cost curve represents the profit-maximizing output level for the firm. In Exhibit 7-17, this occurs at a quantity of 200 units. At this output level, the marginal cost is $20 per unit and the marginal revenue is also $20 per unit. This means that the price that the firm can charge in the short-run to earn zero economic profit is $20 per unit. Therefore, the answer is E) $20 per unit.

Exhibit 7-17 Marginal Revenue and Cost Per Unit Curves