Refer to the data provided in Table 16.2 below to answer the following questions.
Table 16.2
$$\begin{array} { c c c }
\text { Tons of Glass } & \text { MC } & \text { MSC } \
\hline 1 & 20 & 40 \
2 & 30 & 50 \
3 & 40 & 60 \
4 & 50 & 70 \
5 & 60 & 80 \
\hline
\end{array}$$
-Refer to Table 16.2. This glass-recycling firm is perfectly competitive and is forced to take damage costs into account. If the market price of the product is $50, the firm will produce

Question

Refer to the data provided in Table 16.2 below to answer the following questions.
Table 16.2
 $$\begin{array} { c c c } 
\text { Tons of Glass } & \text { MC } & \text { MSC } \
\hline 1 & 20 & 40 \
2 & 30 & 50 \
3 & 40 & 60 \
4 & 50 & 70 \
5 & 60 & 80 \
\hline
\end{array}$$
-Refer to Table 16.2. This glass-recycling firm is perfectly competitive and is forced to take damage costs into account. If the market price of the product is $50, the firm will produce

Quizplus · Accepted Answer

The firm will produce where the market price equals the marginal cost (MC). At 2 tons, the MC is $30, which is less than the price of $50, and at 3 tons, the MC is $40, which is still less than $50. However, at 4 tons, the MC is $50, which matches the market price, but since the firm is forced to consider damage costs (MSC), it will produce where MSC is less than or equal to the price. At 2 tons, MSC is $50, which matches the price, so the firm will produce 2 tons.

Refer to the Data Provided in Table 16 -Refer to Table 16