Is this right?? 7/2516 2:04 PM Micro Principles July 2016 Quiz: Ch13 HW This Que

Question

Is this right?? 7/2516 2:04 PM Micro Principles July 2016 Quiz: Ch13 HW This Question: 1 pt This Quiz: 14 pts possible 8 of 14 (13 complete) Suppose Jerry is one of many used-car salesmen in a city. Assume the market for used cars is monopolistically competitive. The demand for Jerrys cars per week along with his corresponding revenue is shown in the table below. Cars Sold Price Total Revenue Marginal Revenue S20000 $18,000 $36.000 $16,000 $12,000 $14,000 $12,000 $10,000 If Jerry's marginal cost of purchasing a used car from a wholesale distributor is $7.000, how many used cars should Jerry sell to maximize his profits and what price should he charge? To maximize profits. Jerry should sell 4 used cars at a price of S14000 (Enter your responses as integer values) Enter your answer in each of the answer boxes. e a a a

Explanation / Answer

You are correct!

A monopolistically competitive firm will maximize profits by equating MR with MC. Here, MC = $7,000 and closest value of MR is $8,000 which occurs when number of cars is 4.

When Q = 4, Price = $14,000.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.