Quantity Total Revenue Total Cost 0 $0 $3 1 $7 $5 2 $14 $8 3 $21 $12 4 $28 $17 5
ID: 1178351 • Letter: Q
Question
Quantity
Total Revenue
Total Cost
0
$0
$3
1
$7
$5
2
$14
$8
3
$21
$12
4
$28
$17
5
$35
$23
6
$42
$30
7
$49
$38
1 unit of output because marginal cost is minimized.
4 units of output because marginal revenue exceeds marginal cost.
6 units of output because marginal revenue equals marginal cost.
8 units of output because total revenue is maximized.
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity
Total Revenue
Total Cost
0
$0
$3
1
$7
$5
2
$14
$8
3
$21
$12
4
$28
$17
5
$35
$23
6
$42
$30
7
$49
$38
Refer to Table 14-8. In order to maximize profits, the firm will produce (Points : 5)
Explanation / Answer
6 because marginal revenue equals marginal cost at this point.