Chapter 53, Problem 2FRQ

To determine

The shape of the two curves used to find a firm’s profit-maximizing level of output on the basis of the optimal output rule

Explanation of Solution

The shape of the two curves used to find a firm’s profit-maximizing level of output on the basis of the optimal output rule where all units of output are sold at $5:

  

Economics Concept Introduction

Introduction: According to the optimal output rule, a business firm enjoys the maximum profit from the production of output where MR (marginal revenue) is equal to MC (marginal cost).