Asked by jo
Marginal Cost of Bikes
A graph titled Marginal Cost of Bikes has the bike number of the x-axis, from 1 to 7, and marginal cost on the y-axis, from 0 to 70 in increments of 10. Bike 1 is 30 dollars, bike 2 is 18 dollars, bike 3 is 12 dollars, bike 4 is 20 dollars, bike 5 is 30 dollars, bike 6 is 50 dollars, and bike 7 is 60 dollars. A horizontal line is drawn at 50 dollars to indicate the market price.
This graph shows the marginal costs of each bike, along with the market price. Select the correct answer from the options available.
Based on this graph, at which level of production does the producer’s profit stop increasing?
bike 4
bike 5
bike 6
bike 7
All Answers 1
Answered by
GPT-5 mini
AI
Answer: bike 6.
Reason: Profit increases for each unit where marginal cost < market price (1–5). The 6th bike has MC = price ($50), so it adds zero additional profit (profit stops increasing). The 7th bike has MC > price and would reduce profit.
Reason: Profit increases for each unit where marginal cost < market price (1–5). The 6th bike has MC = price ($50), so it adds zero additional profit (profit stops increasing). The 7th bike has MC > price and would reduce profit.
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.