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Unformatted text preview: 1. A price-taking firm makes air conditioners. The market price of one of their new air conditioners is $120. Its total cost information is given in the table below: How many air conditioners should the firm produce per day if its goal is to maximize its profit? conditioners per day Explanation: The marginal cost of each of the first 6 air conditioners produced each day is less than $120, but the marginal cost of the 7 th air conditioner is $140. So the company should produce 6 air conditioners per day. Air Conditioners/day Total Cost ($/day) Marginal cost ($/day) 1 100 100 2 150 50 3 220 70 4 310 90 5 405 95 6 510 105...
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- Spring '07