Question

In: Economics

The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for...

The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.
Table 9.2

Holmes’s Detective Agency

Number of Clients

Marginal Revenue

Marginal Cost

4

  70

  $40

5

  60

  $45

6

  50

  $50

7

  40

  $60

8

  30

  $70

9

  20

  $90

10

  10

$120

Refer to Table 9.2. If we assume that Holmes is currently serving 8 clients, then Holmes Agency:

A) Is maximizing profit.

B) Should find more clients to increase profits.

C) Is maximizing total revenue.

D) Could increase profits by serving less clients.

E) Is minimizing cost.

Solutions

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