Table 13-2
Table 13-2 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
-Refer to Table 13-2.At the profit-maximizing or loss-minimizing output level
A)the firm makes a profit of $12.
B)the firm incurs a loss equal to its fixed cost.
C)the firm makes a profit of $16.
D)the firm incurs a loss of $14.

Question

Table 13-2
  Table 13-2 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
-Refer to Table 13-2.At the profit-maximizing or loss-minimizing output level
A)the firm makes a profit of $12. 
B)the firm incurs a loss equal to its fixed cost. 
C)the firm makes a profit of $16. 
D)the firm incurs a loss of $14.

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal revenue equals marginal cost. At this output level, the firm makes a profit of $16.

Table 13-2 Table 13-2 Shows the Demand and Cost Data