Exhibit 9-8
-Consider Exhibit 9-8. What is the profit-maximizing quantity?

Question

Exhibit 9-8 
-Consider Exhibit 9-8. What is the profit-maximizing quantity?

Quizplus · Accepted Answer

The profit-maximizing quantity occurs at the point where marginal revenue (MR) equals marginal cost (MC). From the exhibit, we can see that MR is equal to the price of $20 for all quantities. To find MC, we can look at the table of costs. The marginal cost of the third unit is $15, which is equal to the marginal revenue. Therefore, producing 3 units would maximize profits.

Exhibit 9-8 -Consider Exhibit 9-8. What Is the Profit-Maximizing Quantity