The price charged by this profit-maximizing firm is $____ and its output is ___ (assume marginal cost is MC1).

Question

Quizplus · Accepted Answer

To find the profit-maximizing output level, we need to equate marginal revenue (MR) with marginal cost (MC). From the table, when the output is 9, MR is $65 and MC is $24. So MC1 (marginal cost) is less than MR ($65 > $24). Therefore, the firm should keep increasing its output till MR=MC1. The output level at which MR=MC1 is 9 units. 
To find the price charged by the firm, we can look at the table again. When output is 9, the total revenue (TR) is $585. Since we know that the output level is 9 and the price is the same for all units sold, we divide TR by 9 to get the price per unit. 
Price per unit = Total revenue/Output = $585/9 = $65.
Therefore, the price charged by this profit-maximizing firm is $65 and its output is 9. 
Hence, the correct answer is option C.

The Price Charged by This Profit-Maximizing Firm Is $____ and Its