Question

Suppose that the owner of a smartphone monopoly hires you to determine whether his firm has made the profit-maximizing number of smartphones. He provides you with the following production and sales information for the first six months of 2016. 
 

Month	Sales	MR of last unit	MC of last unit
January 2016	10,000	$250	$225
February 2016	10,500	$230	$230
March 2016	11,000	$220	$210
April 2016	10,500	$210	$220
May 2016	12,000	$200	$210
June 2016	11,000	$220	$220

Part 1   (1 point)

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In which months should the firm have produced fewer smartphones?  

  

Part 2   (1 point)

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In which months should the firm have produced more smartphones?  

  

Part 3   (1 point)

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In which months was the firm maximizing profits?  

  

Answer 1

In which months should the firm have produced fewer smartphones?  

April and May

  

Part 2   (1 point)

Explanation

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In which months should the firm have produced more smartphones?  

January and March

  

Part 3   (1 point)

Explanation

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In which months was the firm maximizing profits?  

February and June