Question

7. Fill in the columns in the following table. What quantity should

a profit-maximizing firm produce? Verify your answer with
marginal reasoning.

Answer 1

The rule for a profit-maximizing perfectly competitive firm is to produce the level of output where Price= MR = MC, so the raspberry farmer will produce a quantity of 90, which is labeled as e in Figure 4 (a). Remember that the area of a rectangle is equal to its base multiplied by its height.