3)Based On The following Table a. The profit-maximizing output is ______ units.

Question

3)Based On The following Table

a. The profit-maximizing output is ______ units.

b. In the long run, the market price will (Remain Unchaged , rise , or Decline)remain unchangedrisedecline because (firms will enter the market, there are no firms entering or exiting the market, or firms will exit the market.)firms will enter the marketthere are no firms entering or exiting the marketfirms will exit the market.

0 10 3   1 10 5   2 10 6   3 10 8   4 10 11   5 10 16   6 10 23   7 10 33   8 10 47   9 10 62 10 10 78

Explanation / Answer

a. The profit-maximizing output is 3 units where MR or Price is just above MC and equilibrium is established where MC= MR. After 3rd unit MC becomes more than MR.

b) In long run , price remain unchanged because there are no firms entering or exiting the market as firms are earning only normal profits in long run.

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