Use the Following to Answer Question

question 66

Multiple Choice

Use the following to answer question:
-Table: Spring Water.The table shows the demand and cost data for a firm in a monopolistically competitive industry producing drinking water from underground springs.The profit-maximizing price is:

• A)$16.
• B)$3.
• C)$5.
• D)$10.

---

Definitions:

Profit-Maximizing Quantity

The level of production at which a company achieves its highest profit, where marginal cost equals marginal revenue.

Average Total Cost

The total cost divided by the quantity of output produced; it is the sum of average fixed costs and average variable costs.

Marginal Cost

The extra cost incurred when one more unit of a product or service is produced.

Profit

The financial gain made in a transaction, calculated as the difference between the revenue earned and the costs incurred.