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Consider the following information for a firm known as “Delia Industries” that is in a competitive...

Consider the following information for a firm known as “Delia Industries” that is in a competitive market:

q P TR TC Profit MR MC ∆Profit

0 10 4 --- --- ---

1 10 4

2 10 8

3 10 10

4 10 40

5 10 -4

How much will the firm “Delia Industries” produce?

  1. 0
  2. 1
  3. 3
  4. 4
  5. 5
business   economics   
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Answer #1


"Delia Industries" operate in a competitive market.

A firm operating in a competitive market maximizes profit when it produce that level of output corresponding to which price equals marginal cost.

The price equals marginal cost when 3 units of output is produced.

So,

The firm "Delia Industries" will produce 3 units.

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