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.At the profit-maximizing output and price, Will's Beach Ball Company will earn a profit equal to

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.At the profit-maximizing output and price, Will's Beach Ball Company will earn a profit equal to

Quizplus · Accepted Answer

To find the profit-maximizing output and price, we need to look for the quantity where marginal revenue (MR) equals marginal cost (MC). Without explicit MR and MC data, we approximate by looking for a significant change in total revenue (TR) and total cost (TC) as quantity increases. The profit (π) is calculated as TR - TC. At a price of $10 (with a quantity of 7), TR = $10 * 7 = $70, and TC = $52, leading to a profit of $70 - $52 = $18. This suggests that at a price of $10 for 7 units, the company maximizes its profit, making option A correct.