Question

The profit-maximizing output level is 4 units. 4.5 units. 2.5 units. 3 units. b. The profit-maximizing price is $14.30. $25. $40. $32.50. c. The firm has an economic profit of -$30.00. $0. $30.00. $45.50. $18.75. d. If the firm was forced to charge a price that resulted in allocative efficiency, this price would be $20. $14.30. $32.50. $25. e. If the firm was forced to charge a price that resulted in productive efficiency, the output level would be 4 units 2.5 units 0 units 4.5 units

Answer 1

Please see full Question attached Answer and Explanation:

A. Answer A : profit is maximised at output level 2.5 units where marginal revenue(MR) equal to marginal cost(MC)

B. Answer A: Profit is maximised at price $40 where the demand curve matches marginal revenue and marginal cost .

C. Answer C : Economic profit is equal to zero .

D. Answer D. Allocative efficiency is achieved where demand is equal to marginal cost. Level of output at this point is equal price at $25

E. Answer C. Efficient level of output is achieved where average total cost is lowest. From the diagram average total cost is lowest at output level 4.5 units.