Table 13-11
Suppose that a firm in a competitive market faces the following prices and costs:

-Refer to Table 13-11.In order to maximize profits,the firm should stop producing after it makes the

Question

Table 13-11
Suppose that a firm in a competitive market faces the following prices and costs:
 
-Refer to Table 13-11.In order to maximize profits,the firm should stop producing after it makes the

Quizplus · Accepted Answer

The firm should produce up to the point where marginal revenue (MR) equals marginal cost (MC). At the fourth unit, MR is equal to MC and produces a profit-maximizing output level, at which point the firm should stop producing to avoid losses. Beyond this point, marginal cost will exceed marginal revenue, resulting in negative profits.

Table 13-11 Suppose That a Firm in a Competitive Market Faces the Faces