A firm that accepts the market price for its product determines its profit-maximizing output by producing the quantity where the market price equals the cost of producing one more unit (marginal cost). The firm's marginal cost varies with its production level. Given the following specific points on the firm's marginal cost schedule, match each market price to the corresponding quantity the firm will choose to supply.
Marginal Cost Schedule Points:
- The marginal cost of producing the 80th unit is $15.
- The marginal cost of producing the 120th unit is $20.
- The marginal cost of producing the 150th unit is $25.
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CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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A firm operates in a market where it must accept the going price of $12 per unit for its product. The firm's marginal cost (MC) of production, which represents the cost to produce one additional unit, changes with the quantity (Q) it produces. The data is as follows:
- At Q=50, MC = $10
- At Q=60, MC = $11
- At Q=70, MC = $12
- At Q=80, MC = $13
To maximize its profit, what quantity should this firm choose to produce?
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A firm that accepts the market price for its product determines its profit-maximizing output by producing the quantity where the market price equals the cost of producing one more unit (marginal cost). The firm's marginal cost varies with its production level. Given the following specific points on the firm's marginal cost schedule, match each market price to the corresponding quantity the firm will choose to supply.
Marginal Cost Schedule Points:
- The marginal cost of producing the 80th unit is $15.
- The marginal cost of producing the 120th unit is $20.
- The marginal cost of producing the 150th unit is $25.
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