Question

Suppose that a competitive​ firm's marginal cost of producing output q​ (MC) is given by MC (q )equals6plus2 q. Assume that the market price​ (P) of the​ firm's product is ​$18 . What level of output​ (q) will the firm​ produce? The firm will produce nothing units of output. ​(Enter your response rounded to two decimal places.​)

Answer 1

Answer:

The firm will produce 6.00 units of output.

Explanation:

From the question, we have:

MC(q) = 6 + 2q ……………… (1)

P = $18 ………………………. (2)

For any firm, profit is maximized when MC = P. To determine the level of output (q) the firm will produce, we therefore equate equations (1) and (2) and solve for q as follows:

6 + 2q = 18

2q = 18 - 6

2q = 12

q = 12 / 2

q = 6.00

Therefore, the firm will produce 6.00 units of output.