Question

For the firm in Figure 8.1, the profit-maximizing (loss-minimizing) price and level of output are: a. P1 and Q1 b. P2 and Q2 c. P3 and Q1 d. P4 and Q1 The firm depicted in Figure 8.1 is: a. earning

Answer 1

a. The answer is D. At profit maximization the firm produces where MR=MC. Then the price the firm charges is equal to the price on the demand curve...

Answer 2

The answer is D. P4 and Q1.

At profit maximization the firm produces where MR=MC.

Then the price the firm charges are equal to the price on the demand curve.

Profit maximization is an important term in Economics.

It is defined as the long run or short run process through which any firm can determine the input, price and output level which lead to greatest profit.