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 26.2.To maximize profit, Sylvie's Shampoo Company.should produce _______ bottles of shampoo and charge a price of _______ each.

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 26.2.To maximize profit, Sylvie's Shampoo Company.should produce _______ bottles of shampoo and charge a price of _______ each.

Quizplus · Accepted Answer

To maximize profit, a firm should produce at the quantity where marginal cost (MC) equals marginal revenue (MR). Without direct MR data, we look for where the increase in total cost (indicative of MC) is closest to the decrease in price (indicative of MR as price decreases with increased quantity due to the law of demand). From the table, the increase in total cost from 6 to 7 units is $4 ($52 - $48), and the price decrease from $11 to $10 is $1, which doesn't directly give us MR=MC but is the closest information we have. However, the question seems to have provided incorrect data for Sylvie's Shampoo Company, as the table and options relate to Will's Beach Ball Company and do not match the scenario described. Given the mismatch in information, the correct answer cannot be determined from the provided data. The response assumes a hypothetical scenario where the principle of MR=MC for profit maximization is applied.