# Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes...

## Question:

Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the table below.

Number of Mugs Per Day | Total Cost Per Day |

0 | $10 |

1 | $14 |

2 | $19 |

3 | $25 |

4 | $32 |

5 | $40 |

6 | $49 |

If the market for mugs is perfectly competitive, and mugs sell for $7.50 each, then Chris should make _____ mugs per day. (0, 4, 5, or 6)

## Marginal Cost:

Marginal cost is the increase in total cost of production when an additional output is produced. To maximize profit, a firm will produce until marginal revenue is equal to marginal cost.

## Answer and Explanation: 1

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View this answerIn a competitive market, profit-maximizing output is where marginal cost is equal to price. We first compute the marginal cost, which is the addition...

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Chapter 24 / Lesson 6Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.

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