$$\begin{array} { c c }
\text { Output } & \text { Price } \
\hline 1 & \$ 30 \
2 & \$ 27 \
3 & \$ 24 \
4 & \$ 21 \
5 & \$ 18
\end{array}$$
-If the marginal cost were $18,output would be
A)1
B)2
C)3
D)4
E)5

Question

$$\begin{array} { c c } 
\text { Output } & \text { Price } \
\hline 1 & \$ 30 \
2 & \$ 27 \
3 & \$ 24 \
4 & \$ 21 \
5 & \$ 18
\end{array}$$
-If the marginal cost were $18,output would be
A)1
B)2
C)3
D)4
E)5

Quizplus · Accepted Answer

Marginal cost is the change in total cost divided by the change in output. In this case, the marginal cost is $18, which means that the total cost of producing one more unit of output is $18. The price of one unit of output is $30, which means that the profit from producing one more unit of output is $12. Therefore, the profit-maximizing output is 3 units, where the marginal cost equals the marginal revenue.

Output Price 1$302$273$244$215$18\begin{array} { c c } \text { Output } & \text { Price } \\\hline 1 & \$ 30 \\2 & \$ 27 \\3 & \$ 24 \\4 & \$ 21 \\5 & \$ 18\end{array} Output 12345​ Price $30$27$24$21$18​​

$\begin{array} { c c } \text { Output } & \text { Price } \\\hline 1 & \$ 30 \\2 & \$ 27 \\3 & \$ 24 \\4 & \$ 21 \\5 & \$ 18\end{array}$