18 Marginal cost 16 14 Marginal revenue 12 10 Quantity (bushels of fish per day)

Question

18 Marginal cost 16 14 Marginal revenue 12 10 Quantity (bushels of fish per day) Total Cost Number of Bushel Total Total Profit S10 Marginal Marginal Revenue PriceRevenue Cost S 0 13 13 13 13 39 31 85 13 If the price of catfish fell from S13 to $7 per bushel, determine the (a) Profit-maximizing output. Instructions: Enter your response rounded to the nearest whole number bushels (b) Profit or loss per bushel Instructions: Enter your response rounded to the nearest whole number indicate a negative response (loss) with a (-) negative sign. per bushel (c) Total profit or loss Instructions: Enter your response rounded to the nearest whole number indicate a negative response (loss) with a (-) negative sign.

Explanation / Answer

When Price is $7

A. Profit maximizing output 2 bushels per day

B. Profit or loss per bushel -$4 (=-$8/2)

C. Total profit or loss - $ 8.

Q P TR TC Total Profit MR MC 0 7 0 10 -10 - - 1 7 7 15 -8 7 5 2 7 14 22 -8 7 7 3 7 21 31 -10 7 -9 4 7 28 44 -16 7 -13 5 7 35 61 -26 7 -17

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