Economics Quiz Firm Is Making Profit Market Price

Economics Quiz
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Ї Complete the following table and identify the quantity that maximizes profit.
Quantity

TR

MR

TC

MC

0

0

—

5

—

1

10

10

7

2

2

20

10

15

5

3

30

10

25

10

4

40

10

37

20

2. Answer the following questions.
a. Suppose that a firm is producing where 0 < MR < MC. What would happen to total revenue, total cost, and profit if the firm produced one less unit of output?
Answer: If a firm is producing where 0 < MR < MC, then its marginal revenues are lesser than the marginal costs. It means the firm will be losing profit with every additional unit ...