The price charged by this profit-maximizing firm is $__ and its output is _ (assume marginal cost is MC1) .

A) $45;9
B) $45;11
C) $65;9
D) $65;11

Question

The price charged by this profit-maximizing firm is $____ and its output is ___ (assume marginal cost is MC1) .A) $45;9B) $45;11C) $65;9D) $65;11

Alayshia Mo'Nique · Accepted Answer

Final Answer : C, Explanation :  To find the profit-maximizing output level, we need to equate marginal revenue (MR) with marginal cost (MC). From the table, when the output is 9, MR is $65 and MC is $24. So MC1 (marginal cost) is less than MR ($65 > $24). Therefore, the firm should keep increasing its output till MR=MC1. The output level at which MR=MC1 is 9 units.To find the price charged by the firm, we can look at the table again. When output is 9, the total revenue (TR) is $585. Since we know that the output level is 9 and the price is the same for all units sold, we divide TR by 9 to get the price per unit.Price per unit = Total revenue/Output = $585/9 = $65.Therefore, the price charged by this profit-maximizing firm is $65 and its output is 9.Hence, the correct answer is option C.

The price charged by this profit-maximizing firm is $__ and its output is _ (assume marginal cost is MC1) .

A) $45;9
B) $45;11
C) $65;9
D) $65;11

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