Price Quantity Demanded (per week) Marginal Cost Total Revenue Marginal Revenue
ID: 1251325 • Letter: P
Question
Price
Quantity Demanded
(per week)
Marginal
Cost
Total
Revenue
Marginal
Revenue
Fixed
Cost
Total
Cost
$60
1
$50
$60
$60
$40
$90
55
2
20
110
50
40
110
50
3
24
150
40
40
134
45
4
29
180
30
40
163
40
5
35
200
20
40
198
35
6
45
210
10
40
243
According to this chart how do you answer the following questions
a. Assuming you are currently charging $55 per table set, what should you do if you want to maximize profits?
b. Given the demand and cost estimates, what price should you change if you want to maximize your weekly profit?
c. What output should you produce?
d. What is your weekly profit?
Price
Quantity Demanded
(per week)
Marginal
Cost
Total
Revenue
Marginal
Revenue
Fixed
Cost
Total
Cost
$60
1
$50
$60
$60
$40
$90
55
2
20
110
50
40
110
50
3
24
150
40
40
134
45
4
29
180
30
40
163
40
5
35
200
20
40
198
35
6
45
210
10
40
243
Explanation / Answer
A. Increase production because MR>MC. B. Charge a price of 45 (or just a little bit more if you can sell partial units) because this is where MR is closest to MC. C. 4 units This is the quantity associated with a price of 45. D. Profit = Total Revenue - Total Costs Profit = 180 - 163 Profit = 17
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