-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?
A) 0
B) 4 or 5
C) 3 or 4
D) 1 or 2
E) 6

Question

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?
A) 0 
B) 4 or 5 
C) 3 or 4 
D) 1 or 2 
E) 6

Quizplus · Accepted Answer

In a perfectly competitive market, firms will produce up to the point where the price equals the marginal cost (MC). Without the table, we can't see the exact numbers, but given the options and the market price of $2,400, the firm will produce the number of wafers where the MC is closest to but not exceeding $2,400. This ensures the firm maximizes profit by not producing additional units that cost more to make than they can sell for.

-Computer Memory Chips Are Produced on Wafers,each Wafer Having Many