Table 9-3
Table 9-3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 9-3.What are the profit-maximising/loss-minimising output level and price?

Question

Table 9-3
  Table 9-3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 9-3.What are the profit-maximising/loss-minimising output level and price?

Quizplus · Accepted Answer

To find the profit-maximising/loss-minimising output level and price, we need to find the quantity where MR = MC. In this case, the MR can be calculated by subtracting the change in TR from a one-unit increase in output, which is given in the table as the fourth column. The MC is given in the last column.

When MR = MC, the profit-maximising/loss-minimising output level is Q = 4. At this output level, the price is P = $17, which is found by looking at the demand schedule. Therefore, the correct choice is C.

Table 9-3 Table 9-3 Shows the Demand and Cost Schedules