The figure to the right shows the demand, margial cost (MC) and average total Pr

Question

The figure to the right shows the demand, margial cost (MC) and average total Price dollars per pound) cost (ATC) curves for Jason's House of Apples. Which of the following statements is true? OA. Jason should produce where the distance betwoon MC and his demand O B. Jason cannot earn a prohit trom selling any number of apples. O C. Jason should produce where MC equals $3 (point a) where he will O D. Jason should produce where MC equals $3 (point d) where he will MC ATC curve is greatest (point b) Market3 price minimze his losses maximize his profit 10 20 30 40 Quantity thousands of pounds)

Explanation / Answer

Ans) D is the correct option. Jason should produce where MC equals $3 (point d) where he will maximise the profit. At profit maximisation P = MR = MC which is at point d meaning the MC curve cuts the MR at point d

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