Exhibit 9-3
-The firm in Exhibit 9-3, which charges the same price to all customers, will produce where

Question

Exhibit 9-3 
-The firm in Exhibit 9-3, which charges the same price to all customers, will produce where

Quizplus · Accepted Answer

In order to maximize profits, the firm should produce at the quantity where marginal revenue (MR) equals marginal cost (MC). At this point, the firm will be able to sell an additional unit at the same price as all other units, so MR will not change. However, producing more than this quantity would mean that the cost of producing an additional unit (MC) is greater than the revenue gained from selling that additional unit (MR), leading to lower profits. Therefore, the best choice is B, where MR = MC.

Exhibit 9-3 -The Firm in Exhibit 9-3, Which Charges the Same Price