In the graph above at a price of P*, in the above graph, the profit maximizing level of output is

Question

Quizplus · Accepted Answer

At the price of P*, the profit maximizing output level is where marginal revenue (MR) equals marginal cost (MC). This occurs at the intersection of the MR and MC curves. In the given graph, the intersection of the MR and MC curves occurs at output level Q*. Therefore, the profit maximizing level of output is Q*. Choosing options B, C, or D would result in suboptimal profits or losses.

In the Graph Above at a Price of P*, in the Above