Figure 10-9 Figure 10-9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 10-9.The profit-maximizing price is

Question

Figure 10-9  Figure 10-9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 10-9.The profit-maximizing price is

Quizplus · Accepted Answer

The profit-maximizing price is where marginal cost (MC) equals marginal revenue (MR), which is at point S1U1B13. This price results in a quantity demanded of Q1 and a profit of (P1 - ATC) * Q1, which is represented by the shaded rectangle in the graph. Any price above or below this will result in a lower profit.

Figure 10-9 Figure 10-9 Shows the Cost and Demand