Asked by
Emily Lupercio
on Dec 08, 2024Verified
Marginal revenue equals marginal cost at an output of 20 units. At this output, marginal revenue equals $20, average variable cost equals $15, and average total cost equals $25. In the short run, a profit-maximizing firm will earn a profit of
A) -$200.
B) -$100.
C) $200.
D) $400.
Marginal Revenue
The additional income that a company generates from selling one more unit of a good or service.
Average Variable Cost
The per-unit variable cost of production, calculated by dividing total variable costs by the quantity of output produced.
- Calculate marginal revenue and marginal cost and its implications for profit maximization.
Verified Answer
VS
Learning Objectives
- Calculate marginal revenue and marginal cost and its implications for profit maximization.