Answer the question on the basis of the following data confronting a firm: $\begin{array}{l}
\begin{array}{ccr}
&&\text { Marginal }\
\text { Output } & & \text { Reven } \
\hline
0&&--\
1 & & \$ 16 \
2 & & 16 \
3 & & 16 \
4 & & 16 \
5 & & 16
\end{array}
\begin{array}{c}
Marginal\
Cost\
\hline
--\
\$ 10 \
9 \
13 \
17 \
21
\end{array}
\end{array}$ Refer to the data.At the profit-maximizing output,the firm's total revenue is:
A) $48.
B) $32.
C) $80.
D) $64.

Question

Quizplus · Accepted Answer

At the profit-maximizing output, the marginal revenue is equal to the marginal cost. From the table, we can see that the marginal revenue is $16 for all output levels, and the marginal cost is $10 for the first unit of output, $9 for the second unit, $13 for the third unit, $17 for the fourth unit, and $21 for the fifth unit. Therefore, the profit-maximizing output is 3 units, and the total revenue is $16 x 3 = $48.

Answer the Question on the Basis of the Following Data