$$\begin{array} { c r }
\text { Output } & \text { Price } \
1 & \$ 30 \
2 & 28 \
3 & 26 \
4 & 24 \
5 & 22
\end{array}$$
-If the marginal cost were $14,output would be
A)1.
B)2.
C)3.
D)4.
E)5.

Question

$$\begin{array} { c r } 
\text { Output } & \text { Price } \
1 & \$ 30 \
2 & 28 \
3 & 26 \
4 & 24 \
5 & 22
\end{array}$$
-If the marginal cost were $14,output would be
A)1.
B)2.
C)3.
D)4.
E)5.

Quizplus · Accepted Answer

Marginal cost is the cost of producing one additional unit of a good. Firms will produce up to the point where the price of the good equals the marginal cost. In this case, the price that matches the marginal cost of $14 is not explicitly listed, but we can see that the price decreases as output increases. The last price listed is $22 for 5 units of output, which is higher than the marginal cost of $14, suggesting that the firm would produce more if it could. However, since 5 units is the highest output level listed and its price is the closest to the marginal cost without going below it, the firm would produce 5 units of output.

Output Price 1$30228326424522\begin{array} { c r } \text { Output } & \text { Price } \\1 & \$ 30 \\2 & 28 \\3 & 26 \\4 & 24 \\5 & 22\end{array} Output 12345​ Price $3028262422​

$\begin{array} { c r } \text { Output } & \text { Price } \\1 & \$ 30 \\2 & 28 \\3 & 26 \\4 & 24 \\5 & 22\end{array}$