The following table shows the marginal cost of producing th () unit of output by a competitive firm :
| Output | Marginal Cost |
|---|---|
| 1 | 1·0 |
| 2 | 1·3 |
| 3 | 1·7 |
| 4 | 2·3 |
| 5 | 3·0 |
| 6 | 3·9 |
| 7 | 5·0 |
| 8 | 6·5 |
| 9 | 8·2 |
| 10 | 10·0 |
| It is also given that the total cost of producing 3 units of output is 7. |
The profit-maximizing number of units of output for the firm, if the market price of the good is 6, is
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The following table shows the marginal cost of producing n th (n = 1, 2, ⋯, 10) unit of output by a competitive firm: | Output | Marginal Cost | 1 | 1·0 | 2 | 1·3 | 3 | 1·7 | 4 | 2·3 | 5 | 3·0 | 6 | 3·9 | 7 | 5·0 | 8 | 6·5 | 9 | 8·2 | 10 | 10·0 | It is also given that the total cost of producing 3 units of output is 7. The profit-maximizing number of units of output for the firm, if the market price of the good is 6, is (A) 4 (B) 7 (C) 10 (D) None of the above
Also written as: The following table shows the marginal cost of producing n th (n = 1, 2,..., 10) unit of output by a competitive firm: | Output | Marginal Cost | 1 | 1·0 | 2 | 1·3 | 3 | 1·7 | 4 | 2·3 | 5 | 3·0 | 6 | 3·9 | 7 | 5·0 | 8 | 6·5 | 9 | 8·2 | 10 | 10·0 | It is also given that the total cost of producing 3 units of output is 7. The profit-maximizing number of units of output for the firm, if the market price of the good is 6, is
Perfect competition has come up 115 times in 7 exams since 2006.
This question is on Profit maximisation and the competitive firm, part of Perfect competition in Microeconomics.
How a price-taking firm picks output where price equals marginal cost, and when it breaks even or shuts down.
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Question from the JNU SSS 2011 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.