The Frank-Heggood Consulting Company charges clients $\$ 100$ per hour. The maximum number of hours of consulting It can provide each day is 12 hours. The marginal cost of each hour of consulting is given in the table below.
\begin{tabular}{llll}
Price & $Q$ (hours) & Marginal cost $(M C)$ & Marginal Revenue $(M R)$ \
\hline$\$ 100$ & 1 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 2 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 3 & $\$ 20$ & $\$ 100$ \
$\$ 100$ & 4 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 5 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 6 & $\$ 50$ & $\$ 100$ \
$\$ 100$ & 7 & $\$ 60$ & $\$ 100$ \
$\$ 100$ & 8 & $\$ 70$ & $\$ 100$ \
$\$ 100$ & 9 & $\$ 80$ & $\$ 100$ \
$\$ 100$ & 10 & $\$ 90$ & $\$ 100$ \
$\$ 100$ & 11 & $\$ 100$ & $\$ 100$ \
$\$ 100$ & 12 & $\$ 110$ & $\$ 100$
\end{tabular}

If the Frank-Heggood Consulting Company wants to maximize profits, how many hours of consulting should it provide each day?

Choose 1 answer:
(A) 12
(B) $\mathbf{1 0}$
(C) 9
(D) 8

Question

The Frank-Heggood Consulting Company charges clients $\$ 100$ per hour. The maximum number of hours of consulting It can provide each day is 12 hours. The marginal cost of each hour of consulting is given in the table below.
\begin{tabular}{llll} 
Price & $Q$ (hours) & Marginal cost $(M C)$ & Marginal Revenue $(M R)$ \
\hline$\$ 100$ & 1 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 2 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 3 & $\$ 20$ & $\$ 100$ \
$\$ 100$ & 4 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 5 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 6 & $\$ 50$ & $\$ 100$ \
$\$ 100$ & 7 & $\$ 60$ & $\$ 100$ \
$\$ 100$ & 8 & $\$ 70$ & $\$ 100$ \
$\$ 100$ & 9 & $\$ 80$ & $\$ 100$ \
$\$ 100$ & 10 & $\$ 90$ & $\$ 100$ \
$\$ 100$ & 11 & $\$ 100$ & $\$ 100$ \
$\$ 100$ & 12 & $\$ 110$ & $\$ 100$
\end{tabular}

If the Frank-Heggood Consulting Company wants to maximize profits, how many hours of consulting should it provide each day?

Choose 1 answer:
(A) 12
(B) $\mathbf{1 0}$
(C) 9
(D) 8

Accepted Answer

***C*** ∻Key Concept∻ ⚹Profit Maximization⚹ ∻Explanation∻ ⚹In a perfectly competitive market, a firm maximizes profit where marginal cost (MC) equals marginal revenue (MR). Here, MC equals MR at 9 hours.⚹◊What is the relationship between marginal revenue and marginal cost for the Frank-Heggood Consulting Company in this scenario?⍭ Generate me a similar question◊

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