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Which quantity would a price taking firm produce in the short run, if the price is 24? 

          Which quantity would a price taking firm produce in the short run, if the price is 24?

Added by Jennifer O.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Which quantity would a price taking firm produce in the short run, if the price is 24?
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Transcript

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00:01 So first we want to look at our firm's cost structure.
00:03 We see that if our marginal cost is less than or equal to our market price of 20, it's going to produce the quantity where our marginal cost is equal to 20.
00:14 Assuming that our firm's marginal cost is 15, it will produce the quantity of mc is equal to $20, which is 15 units.
00:25 This is the profit maximizing quantity.
00:29 To calculate our total cost from our total revenue, our total revenue on our tr is our market price multiplied by our quantity.
00:40 So we would take 20 times 15, which is 300...
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