(Table) Based on the Table, What Is the Profit-Maximizing Output

question 206

Multiple Choice

(Table) Based on the table, what is the profit-maximizing output for John's Tricycle Company?
$\begin{array}{|c|c|c|}\hline \text { Output } & \begin{array}{c}\text { Marginal } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Revenue }\end{array} \\\hline 5 & 1,200 & 7,500 \\\hline 6 & 1,300 & 9,000 \\\hline 7 & 1,400 & 10,500 \\\hline 8 & 1,500 & 12,000 \\\hline 9 & 1,600 & 13,500 \\\hline\end{array}$

• A) 6 units
• B) 7 units
• C) 8 units
• D) 9 units

Recognize the free rider problem and its impact on the provision of public goods.

Comprehend the reasons behind government intervention in providing public goods.

Identify and explain externalities and their effects on market outcomes.

Understand the principle of economic efficiency and its application in decision-making.

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Definitions:

Incidental Beneficiary

A person who indirectly benefits from the fulfillment of a contract or agreement but has no legal right to enforce the agreement.

Statute of Frauds

A rule of law mandating specific agreements must be documented with the signatures of those participating to be valid and binding.

Oral Evidence

Testimony given by a witness or party during a trial based on what the witness has heard or personally experienced.

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.