Question

Refer to table 14-8. If the firm's fixed cost of production is $3, and the market price is $10, how many units should the firm produce to maximize profit?.

Answer 1

With the profit at x=$7  the firm should produce the maximum number the consumer can receive

What number of units should the firm produce to maximize profit?

From the table we should see the production capacity of the firm and the market absorption capacity as well

With that been said we see that the returns per product sell to be

x=10-3

x=$7

Therefore, the firm should produce the maximum number the consumer can receive.

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