Answer to Question #111517 in Microeconomics for Kyla West

Question #111517
The current market price is $30. The marginal cost (MC) is $1 at 1 unit of output and increases by $1 for every extra unit produced, e.g. at 4 units, MC=$4, at 5 units, MC=$5 and so on. Average total cost (ATC) equals $40 and Average variable cost (AVC) equals $32 at the profit-maximizing level of output.

what is the profit maximizing output
1
Expert's answer
2020-04-23T11:54:00-0400

The profit is maximized when MR = MC = P, so:

MC = P = $30, then Q = 30 units.


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