Carrillo Gibson
06/01/2023 · Primary School
Given the cost and demand conditions shown in Figure \( 10-7 \) for the competitive price-searcher firm, what price charge, and what quantity should it produce in order to maximize profit? a. It should produce 18 units and charge a price of \( \$ 7 \) per unit. b. It should produce 10 units and charge a price of \( \$ 10 \) per unit. c. It should produce 10 units and charge a price of \( \$ 5 \) per unit. d. It should produce 10 units and charge a price of \( \$ 8 \) per unit.
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To maximize profit, find the quantity where marginal cost equals marginal revenue, then determine the price from the demand curve at that quantity. Compare this with the options given to find the correct answer.
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