Asked by Skylar Nicholson on May 02, 2024
Verified
Refer to Figure 15.2. If We Do Hair is maximizing profit as a monopolistically competitive firm, its total costs are
A) $1,200.
B) $960.
C) $800.
D) $660.
Total Costs
The sum of all expenses incurred by a business in producing goods or services, including both fixed and variable costs.
Profit Maximizing
The process or strategy employed by a firm to determine the price, output level, or operational scale that leads to the highest possible profit.
- Acquire competence in evaluating profit, whole revenue, and total financial obligations for companies engaged in markets marked by monopolistic competition.
Verified Answer
AC
Amelia CortezMay 06, 2024
Final Answer :
B
Explanation :
In a monopolistically competitive market, a firm maximizes profit where marginal revenue equals marginal cost. The total cost can be found by multiplying the quantity at which profit is maximized by the average total cost at that quantity. Without the specific details from Figure 15.2, we typically look for the quantity where MR=MC and then find the corresponding total cost from the information provided. Given the options and assuming B is the correct answer, it suggests that at the profit-maximizing quantity, the total costs are $960. This would be based on the specific details of Figure 15.2, which would show the intersection of MR and MC and the corresponding ATC to calculate total costs.
Learning Objectives
- Acquire competence in evaluating profit, whole revenue, and total financial obligations for companies engaged in markets marked by monopolistic competition.