Answer the question based on the demand and cost schedules for a monopolistically competitive firm given in the table below. $\begin{array} { | c | c | c | c | }
\hline \text { Price } & \begin{array} { c }
\text { Quntity } \
\text { Dennded }
\end{array} & \begin{array} { c }
\text { Total } \
\text { Cost }
\end{array} & \text { Output } \
\hline \$ 20 & 1 & \$ 10 & 1 \
\hline 18 & 2 & 20 & 2 \
\hline 16 & 3 & 29 & 3 \
\hline 14 & 4 & 36 & 4 \
\hline 12 & 5 & 40 & 5 \
\hline 10 & 6 & 42 & 6 \
\hline
\end{array}$ At the profit-maximizing level of output, marginal revenue is
A) $0.
B) $4.
C) $5.
D) $8.

Question

Answer the question based on the demand and cost schedules for a monopolistically competitive firm given in the table below. $\begin{array} { | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quntity } \
\text { Dennded }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Cost }
\end{array} & \text { Output } \
\hline \$ 20 & 1 & \$ 10 & 1 \
\hline 18 & 2 & 20 & 2 \
\hline 16 & 3 & 29 & 3 \
\hline 14 & 4 & 36 & 4 \
\hline 12 & 5 & 40 & 5 \
\hline 10 & 6 & 42 & 6 \
\hline
\end{array}$ At the profit-maximizing level of output, marginal revenue is
A) $0.
B) $4.
C) $5.
D) $8.

Quizplus · Accepted Answer

At the profit-maximizing level of output, marginal revenue equals marginal cost. The marginal cost from producing the 5th unit is $4 (from $36 to $40), and the marginal revenue from selling the 5th unit is also $4 (from $16 to $12).

Answer the Question Based on the Demand and Cost Schedules