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

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

$\text {Table $26.2$}$
$\text {A Monopolistically Competitive Firm}$ Refer to Table 26.2.At the profit-maximizing output and price, Sylvie's Shampoo Company.will earn a profit equal to

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.At the profit-maximizing output and price, Sylvie's Shampoo Company.will earn a profit equal to

Quizplus · Accepted Answer

To find the profit-maximizing output and price, we need to identify where Marginal Revenue (MR) equals Marginal Cost (MC). Since the table does not directly provide MR or MC, we can infer the profit-maximizing level by looking for where additional output increases total cost at a rate that could be offset by additional revenue. Without explicit MR and MC, another approach is to calculate profit at each level and identify the maximum profit.Profit is calculated as (Price * Quantity) - Total Cost. We calculate profit for each price point:- At $22: Profit = (22 * 6) - 96 = 132 - 96 = $36- At $20: Profit = (20 * 7) - 104 = 140 - 104 = $36- At $18: Profit = (18 * 8) - 114 = 144 - 114 = $30- At $16: Profit = (16 * 9) - 126 = 144 - 126 = $18- At $14: Profit = (14 * 10) - 140 = 140 - 140 = $0The maximum profit occurs at both $22 and $20 price points, each yielding a profit of $36. However, since the question asks for the profit-maximizing output and price without specifying the need to choose between equal profit levels, and considering the typical behavior of firms to prefer higher output if profits are equal, the correct answer based on the provided data and typical economic behavior would be $36, which corresponds to the profit at the $22 price point before considering the equal profit at a lower price point with higher output. Thus, the correct choice is A, $36, as it represents the highest profit level identified in the calculation.

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

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