Question 4
Market StructuresOutput(kg) | 240 | 450 | 580 | 630
MR(₦) | 75 | 48 | –40 | –22
MC(₦) | 41 | 48 | 77 | 20
Given the table above, what is the firm's short-run profit-maximizing output?
- A.450g
- B.630 kg
- C.240 kg
- D.580 kg
Show the answer and explanation
Answer: A (450g)
Explanation
Profit is greatest where marginal revenue equals marginal cost. MR = MC = ₦48 at an output of 450 kg.