(Figure: Profit-Maximizing Quantity and Price II) Which of the Following

question 55

Multiple Choice

(Figure: Profit-maximizing Quantity and Price II) Which of the following statements is (are) TRUE? I. If the firm is producing 5 units of output, it should expand output to increase profits because P > MC.
II) At a price of $16, the firm's profits would rise if it raised its price.
III) The profit-maximizing quantity is 600 units.
IV) The profit-maximizing price is $13.

• A) I and III
• B) IV
• C) II
• D) III

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Definitions:

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