In: Economics
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.