Table 13-1
Table 13-1 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories.
-Refer to Table 13-1.Victoria's profit-maximizing output is where
A)total profit equals $3.
B)marginal revenue and marginal cost both equal $4.
C)marginal revenue and marginal cost both equal $3.
D)marginal cost is at its minimum value.

Question

Table 13-1
  Table 13-1 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories.
-Refer to Table 13-1.Victoria's profit-maximizing output is where
A)total profit equals $3. 
B)marginal revenue and marginal cost both equal $4. 
C)marginal revenue and marginal cost both equal $3. 
D)marginal cost is at its minimum value.

Quizplus · Accepted Answer

To maximize profit, a firm should produce where marginal revenue (MR) equals marginal cost (MC). In this case, the profit-maximizing output is where MR and MC both equal $3, which is the answer choice C. At this output level (60 boxes per week), total revenue is $540, total cost is $360, and total profit is $180, which is the highest value among all the output levels. Therefore, the correct answer is C.

Table 13-1 Table 13-1 Lists Estimated Revenues and Costs (Per