Remaining Time: 1 hour, 12 minutes, 04 seconds. Question Completion Status: QUES

Question

Remaining Time: 1 hour, 12 minutes, 04 seconds. Question Completion Status: QUESTION 11 Table 14-7 following revenues and costs: Marginal Cost $5 $6 S7 $8 $9 $10 Marginal Revenue 59 59 $9 $9 59 S9 Quantity 12 13 15 17 Refer to Table 14-7 If the firm is currently producing 14 units, what would you advise the owners? O a. increase quantity to 17 units O b.increase quantity to 16 units c. continue to operate at 14 units d decrease quantity to 13 units Click Saue and Submit to save and submit. Click Save All Ansvers to save all answers.

Explanation / Answer

Correct option: increase quantity to 16 units

Reason: Profits are maximized at the point MR = MC

Looking at the given table, this occurs at Q = 16 when MR = MC = 9

Since at Q = 14, MR (9) > MC (7), output needs to be increased till the point MR = MC is reached at Q = 16

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---