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Answer to Question #5506 in Microeconomics for Bessie Allen

Question #5506
marcia is a fashion designer who runs a small business in a competitive industry. marcia sells 10 dresses per month. her monthly revenue is $5,000 the marginals cost $400. in order to maximise profits Marcia should?
Expert's answer
To maximize profits MR = P = MC. The price P = TR/Q = 5000/10 = $500. Marcia
should reduce her price by $100, then MR = MC = P = $400 and she will maximize
her profit.

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