How much aluminum must firm produce


An aluminum company can produce Q units of a bauxite, a mineral used to produce aluminum, with marginal costs of MC = 9 + Q, and can create and market aluminum at a marginal cost of MC = 5 (excluding the cost of the bauxite necessary). The demand for aluminum is given by P = 30 - 1.5Q. If an external market exists where bauxite can be bought or sold for $13, how much aluminum should the firm produce?

a.5 units

b.7 units

c.4 units

d.0 units

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Microeconomics: How much aluminum must firm produce
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