Demand and Cost Data for Will's Beach Ball Company

Price Demand Data Quantity Cost Data Output Total Cost

$11 6 6 $48

$10 7 7 $52

$9 8 8 $57

$8 9 9 $63

$7 10 10 $70

Table $26.1$ A Monopolistically Competitive Firm Refer to Table 26.1.In order to maximize profit, Will's Beach Ball Company should produce _______ and charge a price of _______ each. A) 6 beach balls; $11 B) 7 beach balls; $10 C) 8 beach balls; $9 D) 9 beach balls; $8

Question

Demand and Cost Data for Will's Beach Ball Company

Price	Demand Data Quantity	Cost Data Output	Total Cost
$11	6	6	$48
$10	7	7	$52
$9	8	8	$57
$8	9	9	$63
$7	10	10	$70

Table $26.1$ A Monopolistically Competitive Firm Refer to Table 26.1.In order to maximize profit, Will's Beach Ball Company should produce _______ and charge a price of _______ each. A) 6 beach balls; $11 B) 7 beach balls; $10 C) 8 beach balls; $9 D) 9 beach balls; $8

Quizplus · Accepted Answer

To maximize profit, a company should produce where marginal cost (MC) is equal to marginal revenue (MR). Without explicit MR data, we look for where the increase in total cost (indicative of MC) is less than or equal to the increase in revenue from selling one more unit. From the table, moving from 6 to 7 beach balls increases total cost by $4 ($52 - $48) and revenue by $10 ($70 - $60), suggesting this is the most profitable increment.