The marginal revenue (MR) for a firm is a constant $45, and the firm's marginal cost (MC) is given by MC = 1.5Q (where Q is quantity of output). What is the firm's profit-maximizing level of output?

Question

Quizplus · Accepted Answer

To find the profit-maximizing output, we need to set MR = MC. 
Given, MR = $45 
And, MC = 1.5Q

So, 45 = 1.5Q

Solving for Q, we get Q = 30.

Therefore, the firm's profit-maximizing level of output is 30.

The Marginal Revenue (MR) for a Firm Is a Constant