MC ATC P2 MR Q 02 0,0 Quantity (units per day 8) Using the above figure, which o
ID: 1112575 • Letter: M
Question
MC ATC P2 MR Q 02 0,0 Quantity (units per day 8) Using the above figure, which of the following statements is true? A) At quantity 1, the marginal revenue of the last unit produced is greater than the marginal cost, so t maximize its profit the firm should produce moxe B) At quantity 21, the marginal revenue of the last unit produced is equal to the marginal cost, so to maximize its profit the firm should produce no more nor less. C) At quantity 04, the average total cost of the last unit produced is equal to the price, so to maximize profit the firm should produce no more nor less. D) At quantity 24, the marginal revenue of the last unit produced is less than the marginal cost, so to maximize its profit the firm should produce more.Explanation / Answer
Answer
option B
The firm produces at MR=MC or the closet lower MC
It is at Q1
where
MR=MC and the profit is maximum or loss is minimum,
because profit is maximum at the marginal profit equal to zero. marginal profit=MR-MC
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