Big Top is the only circus in the nation The table sets out the demand schedule
ID: 1109337 • Letter: B
Question
Big Top is the only circus in the nation The table sets out the demand schedule for circus tickets and the cost schedule for producing the circus Calculate Big Top's profit-maximizing price, output and economic profit if it charges a single price for all tickets Price (dollars per ticket) 10 Quantity tickets per show) 100 200 300 400 500 600 700 800 Total cost (dollars per show) 1,000 1,600 2,200 2,800 3,400 4,000 4,600 5,200 5,800 Big Top's profit-maximizing output is 200 tickets a show Big Top's profit-maximizing price is S 8 a ticket >>>Answer to 2 decimal places 6 4 When Big Top produces the profit-maximizing output and charges the profit-maximizing price, economic profit is $ >>> if the firm incurs an economic loss, indicate the loss with a minus sign: If the firm makes an economic profit do not include a plus sign 2Explanation / Answer
Answer
MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p
TR=P*Q
MR of n th unit=(TR of n units -TR of p units)/(n-p)...................n>p
profit=TR-TC
---------
The firm produces at MR=MC or the closet lower MC
where
Q=200
P=$8
Economic profit=-$600
P Q TC TR MC MR Profit 10 0 1000 0 -1000 9 100 1600 900 6 9 -700 8 200 2200 1600 6 7 -600 7 300 2800 2100 6 5 -700 6 400 3400 2400 6 3 -1000 5 500 4000 2500 6 1 -1500 4 600 4600 2400 6 -1 -2200 3 700 5200 2100 6 -3 -3100 2 800 5800 1600 6 -5 -4200Related Questions
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