$\text {Demand and Cost Data for Sylvie's Shampoo Company}$

$\begin{array}{cccc}
\text { Price } & \begin{array}{c}
\text { Demand Data } \
\text { Quantity }
\end{array} & \begin{array}{c}
\text { Cost Data } \
\text { Output }
\end{array} & \text { Total Cost } \
\$ 22 & 6 & 6 & \$ 96 \
\$ 20 & 7 & 7 & \$ 104 \
\$ 18 & 8 & 8 & \$ 114 \
\$ 16 & 9 & 9 & \$ 126 \
\$ 14 & 10 & 10 & \$ 140
\end{array}$

$\text {Table $26.2$}$
$\text {A Monopolistically Competitive Firm}$ Refer to Table 26.2.To maximize profit, Sylvie's Shampoo Company.should produce _______ bottles of shampoo and charge a price of _______ each.

Question

$\text {Demand and Cost Data for Sylvie's Shampoo Company}$

$\begin{array}{cccc}
\text { Price } & \begin{array}{c}
\text { Demand Data } \
\text { Quantity }
\end{array} & \begin{array}{c}
\text { Cost Data } \
\text { Output }
\end{array} & \text { Total Cost } \
\$ 22 & 6 & 6 & \$ 96 \
\$ 20 & 7 & 7 & \$ 104 \
\$ 18 & 8 & 8 & \$ 114 \
\$ 16 & 9 & 9 & \$ 126 \
\$ 14 & 10 & 10 & \$ 140
\end{array}$

$\text {Table $26.2$}$
$\text {A Monopolistically Competitive Firm}$ 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, Sylvie's Shampoo Company should produce where marginal revenue equals marginal cost, which is at the output level of 7. At this output level, the price she should charge is the corresponding price listed in the table, which is $20. Any other output level will yield a lower profit. Therefore, the best choice is B, which corresponds to producing 7 bottles of shampoo and charging $20 per bottle.

Demand and Cost Data for Sylvie’s Shampoo Company\text {Demand and Cost Data for Sylvie's Shampoo Company}Demand and Cost Data for Sylvie’s Shampoo Company

$\text {Demand and Cost Data for Sylvie's Shampoo Company}$