Egt 1.1

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EGT 1 Task 1 William Jarrod Reed Western Governors University Student ID: 000178779 Mentor: Aminah Abdul-Hakim Throughout this task I will do my best to explain how firms determined to maximize profit do just that. Specifically I will delineate how such firms choose the optimum level of production or output for the goods they produce and how they behave with respect to various elevations of marginal revenue. In my attempt it will be appropriate for me to clarify the definitions of various economic terms in order to assure a proper understanding of my thoughts on this topic, I will provide these definitions throughout. Understanding the concept of profit maximization lies with the explanation of total revenue to…show more content…
Such firms identify this optimized level of output by determining the specific point at which marginal revenue and marginal cost are equal. The value to the firm is that this knowledge tells them when they have maximized their profit making potential. Going past this point will result in a negative return. The point of profit maximization for the firm in the given scenario occurs at a quantity of 8 units. At this point they have maximized their profit and as you can see to go beyond this point would cause the firm to incur economic losses. Quantity|Total Revenue|Total Cost|Marginal Revenue|Marginal Cost|Profit Maximization| | | | | | | 0|$0.00|$10.00| | | | 1|$150.00|$30.00|$150.00|$20.00|$130.00| 2|$290.00|$50.00|$140.00|$20.00|$120.00| 3|$420.00|$80.00|$130.00|$30.00|$100.00| 4|$540.00|$120.00|$120.00|$40.00|$80.00| 5|$650.00|$170.00|$110.00|$50.00|$60.00| 6|$750.00|$230.00|$100.00|$60.00|$40.00| 7|$840.00|$300.00|$90.00|$70.00|$20.00| 8|$920.00|$380.00|$80.00|$80.00|$0.00| 9|$990.00|$470.00|$70.00|$90.00|-$20.00| 10|$1,050.00|$570.00|$60.00|$100.00|-$40.00| 11|$1,100.00|$680.00|$50.00|$110.00|-$60.00| 12|$1,140.00|$800.00|$40.00|$120.00|-$80.00| 13|$1,170.00|$930.00|$30.00|$130.00|-$100.00| 14|$1,190.00|$1,070.00|$20.00|$140.00|-$120.00| 15|$1,200.00|$1,220.00|$10.00|$150.00|-$140.00| Given the above
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