Table 13-9
Suppose that a firm in a competitive market faces the following revenues and costs:

-Refer to Table 13-9.At which quantity of output is marginal revenue equal to marginal cost?

Question

Table 13-9
Suppose that a firm in a competitive market faces the following revenues and costs:
 
-Refer to Table 13-9.At which quantity of output is marginal revenue equal to marginal cost?

Quizplus · Accepted Answer

Marginal revenue is equal to marginal cost at the quantity of output where the two intersect. In this case, that occurs at 6 units, where both MR and MC are equal to $4. At any quantity less than 6, MR > MC, so the firm can increase profit by producing more. At any quantity more than 6, MC > MR, so the firm can increase profit by producing less. Thus, the optimal quantity for the firm to produce is 6 units.

Table 13-9 Suppose That a Firm in a Competitive Market Faces the Faces