Table 9.5
$$\begin{array} { | c | c | c | }
\hline \text { Quantity } & \begin{array} { c }
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 18 & 14 \
\hline 2 & 16 & 20 \
\hline 3 & 14 & 26 \
\hline 4 & 12 & 32 \
\hline 5 & 10 & 38 \
\hline 6 & 8 & 44 \
\hline
\end{array}$$ Table 9.5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
-Refer to Table 9.5.At the profit-maximising or loss-minimising output level ________.

Question

Table 9.5
 $$\begin{array} { | c | c | c | } 
\hline \text { Quantity } & \begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 18 & 14 \
\hline 2 & 16 & 20 \
\hline 3 & 14 & 26 \
\hline 4 & 12 & 32 \
\hline 5 & 10 & 38 \
\hline 6 & 8 & 44 \
\hline
\end{array}$$ Table 9.5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
-Refer to Table 9.5.At the profit-maximising or loss-minimising output level ________.

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal revenue equals marginal cost. From the table, we can see that marginal revenue is $16 and marginal cost is $14 at an output level of 3. Therefore, the profit-maximizing output level is 3, and the firm makes a profit of $16.

Table 95 Table 95 Shows the Demand and Cost Data Facing a Monopolistically