If a competitive firm can sell its product at $1,600 per unit and the marginal cost of the firm is MC = 1,100 + 2Q,then the firm will produce
A)1,084 units.
B)250 units.
C)160 units.
D)1,100 units.

Question

Quizplus · Accepted Answer

In a competitive market, a firm will produce where price equals marginal cost (P = MC). Given P = $1,600 and MC = 1,100 + 2Q, setting them equal gives 1,600 = 1,100 + 2Q. Solving for Q, we get 500 = 2Q, or Q = 250 units.

If a Competitive Firm Can Sell Its Product at $1,600