Output sandwiches per hour Average total cost (S per sandwich) 17.00 0.00 8.00 8

Question

Output sandwiches per hour Average total cost (S per sandwich) 17.00 0.00 8.00 8.80 4 pts The table in the previous question shows Jensen's output (sandwich) and costs, a perfectly competitive firm. Jensen's fixed cost is $9 per hour. The current market price is $6. What quantity of sandwiches produced will maximize Jensen's economic profit in the short run? 3 sandwiches per hour because this output will equate marginal revenue and marginal cost 1 sandwiches per hour 4 sandwiches per hour as the firm wants to produce more 5 sandwiches per hour since it helps the frm reach the maximum achievable proft 2 sandwiches per hour because it will maximize proft

Explanation / Answer

Q AC TC MC MR 1 17 17 - 6 2 10 20 3 6 3 8 24 4 6 4 8 32 8 6 5 8.8 44 12 6 6 10 60 16 6 Answer is 3 sandwitches per hour because this output will equate Marginal revennue and marginal cost. Explanation: Here at this output level, the Marginal cost is lesser than or equal to Marginal revneue, afterwards it tends to be higher than MR.

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