Table 13-10
Suppose that a firm in a competitive market faces the following revenues and costs:

-Refer to Table 13-10.This firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to

Question

Table 13-10
Suppose that a firm in a competitive market faces the following revenues and costs:
 
-Refer to Table 13-10.This firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to

Quizplus · Accepted Answer

The firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to the marginal revenue. At the level of output where MC=MR, the firm maximizes its profit. In this case, the MC is $7 at the level of output of 3 units, which is less than the marginal revenue of $8. Therefore, the firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to $7.

Table 13-10 Suppose That a Firm in a Competitive Market Faces the Faces