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Which quantity should it produce

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Let's say that you are looking at a table with output and cost data for a monopoly and you observe the following:

  • At a quantity of 300 units, the firm's marginal cost and marginal revenue both equal $2.40.
  • At a quantity of 400 units, the firm's marginal cost reaches its lowest point at $1.80.
  • At a quantity of 500 units, the firm's average total cost reaches a minimum of $2.00.
  • At a quantity of 600 units, the firm's marginal cost and marginal revenue both equal $2.40 again.
  • At a quantity of 700 units, the firm's marginal cost is $5.00 and its marginal revenue is $3.00.

If this firm wants to maximize its profits, which quantity should it produce? Explain your answer please.

Reference no: EM132499829

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