Table 17-7. The table shows the demand schedule for a particular product.

-Refer to Table 17-7.If this market is perfectly competitive and the marginal cost is constant at $2 per unit,then how much output will be produced?
A) 20
B) 30
C) 35
D) 40

Question

Table 17-7. The table shows the demand schedule for a particular product.
 
-Refer to Table 17-7.If this market is perfectly competitive and the marginal cost is constant at $2 per unit,then how much output will be produced?
A) 20 
B) 30 
C) 35 
D) 40

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce where price equals marginal cost. If the marginal cost is constant at $2, the firm will produce where the price is also $2. Assuming the table shows a price of $2 at an output of 40 units, the correct output is 40.