Consider the total cost and total revenue given in the following table:(Make sure to show all your work.)TotalMarginalTotalMarginalOutputCostsCostsRevenue Revenue$0$8$16$81$9$10$11$13$19$27$37$24$32$40$48$5647a. Calculate the marginal costs and marginal revenue.b. How much should the firm produce to maximize profits? Explain.c. What is the price of the product? Explain.

A firm will maximise profit at a point where marginal revenue is equal to marginal cost and price is…

Consider the total cost and total revenue given in the following table (Make sure to show all your work.) Total Marginal Marginal Costs Total Output Costs Revenue Revenue $0 $8 $16 $8 1 $9 $10 $11 2 $13 $19 $27 $37 $24 $32 $40 $48 $56 4 6. 7 a. Calculate the marginal costs and marginal revenue. b. How much should the firm produce to maximize profits? Explain. What is the price of the product? Explain.

Consider the total cost and total revenue given in the following table (Make sure to show all your work.) Total Marginal Marginal Costs Total Output Costs Revenue Revenue $0 $8 $16 $8 1 $9 $10 $11 2 $13 $19 $27 $37 $24 $32 $40 $48 $56 4 6. 7 a. Calculate the marginal costs and marginal revenue. b. How much should the firm produce to maximize profits? Explain. What is the price of the product? Explain.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 4.7P

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Similar questions

A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
How does the average cost curve help to show whether a firm is making profits or losses?
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?