Refer to the accompanying graph to answer the following questions.

-The firm is experiencing gains from specialization up to what level of output along the marginal cost curve?

Question

Refer to the accompanying graph to answer the following questions.
 
-The firm is experiencing gains from specialization up to what level of output along the marginal cost curve?

Quizplus · Accepted Answer

The gains from specialization occur up to the point where the marginal cost is equal to the marginal revenue, which is at Q1 on the graph. Beyond this point, producing additional units of output will lead to an increase in marginal cost, which will decrease profits. Therefore, Q1 represents the optimal level of output for the firm.

Refer to the Accompanying Graph to Answer the Following Questions