Table 14-5
Suppose That a Firm in a Competitive Market

question 1

Multiple Choice

Table 14-5
Suppose that a firm in a competitive market faces the following revenues and costs:
​
$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Marginal Cost } \\\text { (Dollars) }\end{array} & \begin{array} { c } \text { Marginal Revenue } \\\text { (Dollars) }\end{array} \\\hline 12 & 5 & 7 \\\hline 13 & 6 & 7 \\\hline 14 & 7 & 7 \\\hline 15 & 8 & 7 \\\hline 16 & 9 & 7 \\\hline 17 & 10 & 7 \\\hline\end{array}$$
-Refer to Table 14-5. If the firm is maximizing profit, how much profit is it earning?

• A)$0.50
• B)$7.50
• C)$10
• D)There is insufficient data to determine the firm's profit.

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Definitions:

Employer/Employee Context

The environment and circumstances surrounding the relationship between an employer and their employees, which includes rights, obligations, and expectations.

Restrict

To limit or control the size, amount, or range of something through regulations or conditions.

Recognizance

An obligation in which a party acknowledges in court that he or she will perform some specified act and/or pay a price on failure to do so.

Formal Contract

A legally binding agreement that requires a specific form, such as being in writing, to be valid.