The table given below reports the marginal revenue and marginal cost of Holmes D
ID: 1208369 • Letter: T
Question
The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.
Table 22.2
Holmes’s Detective Agency
Number of Clients
Marginal Revenue
Marginal Cost
1
100
$200
2
90
$100
3
80
$80
4
70
$40
5
60
$45
6
50
$50
7
40
$60
8
30
$70
9
20
$90
10
10
$120
According to Table 22.2, what will be the total number of clients that will maximize profits for the Holmes Detective Agency?
Holmes’s Detective Agency
Number of Clients
Marginal Revenue
Marginal Cost
1
100
$200
2
90
$100
3
80
$80
4
70
$40
5
60
$45
6
50
$50
7
40
$60
8
30
$70
9
20
$90
10
10
$120
Explanation / Answer
A 6
As profits for the Holmes Detective Agency will be maximized when MR = MC .
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