Answer to Question #205896 in Microeconomics for EM MAFOKWANE

Question

n a perfectly competitive market for widgets, the market price is R15. Use the cost information for a firm producing widgets in this market given in the table below and answer the question that follows.

Answer 1

Missing part of the question:

The firm should?

Solution

Total Revenue = Quantity X Price

Price = 15

The firm maximized their profit When the Marginal revenue is equal to the marginal cost of the firm, In above table MR is equal to MC at Quantity between 5 to 7 units. firm should produce between this as they get maximum profit at this stage.