The firm's most efficient output would be

Question

Quizplus · Accepted Answer

The most efficient output is where marginal revenue (MR) = marginal cost (MC). Looking at the table, we can see that at an output level of 90, MR = $820 (the change in total revenue from producing one additional unit) and MC = $820 (the change in total cost from producing one additional unit). At any other output level, either MR is less than MC (meaning producing one more unit would cause revenue to decrease by more than cost) or MR is greater than MC (meaning there is potential profit to be made by producing more units). Thus, the firm's most efficient output is 90.

The Firm's Most Efficient Output Would Be