Output Marginal Revenue Marginal Cost 0 1$16$10 216 9 3 1613 4 1617 516 21 Refer to the above...
Question:
| Output | Marginal Revenue | Marginal Cost |
| 0 | - | - |
| 1 | $16 | $10 |
| 2 | 16 | 9 |
| 3 | 16 | 13 |
| 4 | 16 | 17 |
| 5 | 16 | 21 |
Refer to the above data. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be
a. 2
b. 3
c. 4
d. 5
Marginal Revenue and Marginal Cost:
Marginal revenue and marginal cost are two aspects of a production decision that matter to firms. An additional unit of production is profitable only if the marginal revenue is higher than the marginal cost.
Answer and Explanation: 1
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View this answerThe answer is b).
An additional unit of output should be produced if the marginal revenue is higher than the marginal cost. For the first unit of...
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Profit Maximization: Definition, Equation & Theory
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Chapter 24 / Lesson 6
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Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.
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