Figure 9-8 Figure 9-8 shows cost and demand curves for a monopolistically competitive producer of iced tea.
-Refer to Figure 9-8.What is the profit-maximising output level?

Question

Figure 9-8  Figure 9-8 shows cost and demand curves for a monopolistically competitive producer of iced tea.
-Refer to Figure 9-8.What is the profit-maximising output level?

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal cost equals marginal revenue. In this case, marginal cost is $2 and marginal revenue is $3. Therefore, the profit-maximizing output level is 22 cases.

Figure 9-8 Figure 9-8 Shows Cost and Demand Curves