Use the figure to answer the following question(s).
Figure 9-4

If the market price of the product in Figure 9-4 rose to $8, indicate the firm's profit-maximizing output and total revenue.
A) output, 5 million; total revenue, $30 million
B) output, 5 million; total revenue, $40 million
C) output, 6 million; total revenue, $10 million (approx.)
D) output, 6 million; total revenue, $48 million

Question

Use the figure to answer the following question(s).
Figure 9-4

If the market price of the product in Figure 9-4 rose to $8, indicate the firm's profit-maximizing output and total revenue.
A) output, 5 million; total revenue, $30 million 
B) output, 5 million; total revenue, $40 million 
C) output, 6 million; total revenue, $10 million (approx.) 
D) output, 6 million; total revenue, $48 million

Quizplus · Accepted Answer

At a market price of $8, the profit-maximizing output is where marginal revenue equals marginal cost, which is 6 million units. At this output level, the total revenue is $8 times 6 million units, which equals $48 million. Therefore, the correct choice is D.

Use the Figure to Answer the Following Question(s)