Scenario 13-2
Assume a certain firm is producing Q = 1,000 units of output.At Q = 1,000,the firm's marginal cost equals $20 and its average total cost equals $25.The firm sells its output for $30 per unit.
-Refer to Scenario 13-2.To maximize its profit,the firm should

Question

Quizplus · Accepted Answer

At Q = 1,000, the firm's marginal cost is less than its selling price ($20 < $30). Therefore, the firm should increase its output to sell more units and generate more revenue, which will result in higher profits since marginal revenue exceeds marginal cost.

Scenario 13-2 Assume a Certain Firm Is Producing Q = 1,000 Units