Suppose a Monopolistically Competitive Firm's Output Where Marginal Revenue Equals

question 267

Multiple Choice

Suppose a monopolistically competitive firm's output where marginal revenue equals marginal cost is 66 units and the price corresponding to this quantity is $18.If the average total cost at this output is $16.55, then its total profit is

• A)$1,188.
• B)$1,092.30.
• C)$95.70.
• D)$1.45.

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Definitions:

Additional Unit

The next unit of product or service that is being considered for production or consumption.

Marginal Cost

Incremental expense incurred from the production of one additional unit of a good.

Average Total Cost

The total costs of production divided by the total output, indicating the average cost per unit of output.

Total Cost

The combined total of expenses involved in making goods or services, including costs that do not change and those that do.