Max\'s Markers is a perfectly competitive company producing markers. Suppose Max
ID: 1225538 • Letter: M
Question
Max's Markers is a perfectly competitive company producing markers. Suppose Max is producing 1,200 markers an hour. If the total cost of 1,200 markers is $600, the market price per marker is $2, and the marginal cost is $2, then Max
is maximizing his profit and is making an economic profit.
should increase his output to increase his profit.
makes an economic profit because marginal revenue is equal to marginal cost at this output level.
is not maximizing his profit but is making zero economic profit anyway.
should decrease his output to increase his profit.
A)is maximizing his profit and is making an economic profit.
B)should increase his output to increase his profit.
C)makes an economic profit because marginal revenue is equal to marginal cost at this output level.
D)is not maximizing his profit but is making zero economic profit anyway.
E)should decrease his output to increase his profit.
Explanation / Answer
OPTION D