The following graph shows the costs for a perfectly competitive producer:

-Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?

Question

The following graph shows the costs for a perfectly competitive producer:
 
-Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?

Quizplus · Accepted Answer

To determine the profit-maximizing output, we need to find the quantity where MC=MR. From the graph, we can see that MC=MR at quantity 90. At this output level, the producer will be able to produce and sell its output at a cost of $20, and the revenue earned will be $35, resulting in a profit of $15 per unit. Therefore, the profit-maximizing output is 90.

The Following Graph Shows the Costs for a Perfectly Competitive