$$\begin{array} { c r }
\text { Output } & \text { Price } \
1 & \$ 30 \
2 & 28 \
3 & 26 \
4 & 24 \
5 & 22
\end{array}$$
-If the marginal cost were $22,the firm would maximize its profit at _____ unit(s)of output.
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 $22,the firm would maximize its profit at _____ unit(s)of output.
A)1
B)2
C)3
D)4
E)5

Quizplus · Accepted Answer

The marginal cost is the change in total cost divided by the change in output. In this case, the marginal cost is $22. The profit-maximizing output is the output at which marginal cost equals marginal revenue. The marginal revenue is the change in total revenue divided by the change in output. In this case, the marginal revenue is $2. The profit-maximizing output is therefore 3 units.

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​

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