Price Quantity Total Cost $25.00 0 $130 $24.00 10 $275 $23.00 20 $435 $22.50 30 $610 $22.00 40 $800 $21.60 50 $1,005 $21.20 60 $1,225 Sharon's Day Spa began to offer a relaxing aromatherapy treatment.  The firm asks you how much to charge to maximize profits.  The demand curve for the treatment is given by the first two columns in the table above.  The total costs are provided in the third column.  For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost.  What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 2E: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large...
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Price Quantity Total Cost
$25.00 0 $130
$24.00 10 $275
$23.00 20 $435
$22.50 30 $610
$22.00 40 $800
$21.60 50 $1,005
$21.20 60 $1,225

Sharon's Day Spa began to offer a relaxing aromatherapy treatment.  The firm asks you how much to charge to maximize profits.  The demand curve for the treatment is given by the first two columns in the table above.  The total costs are provided in the third column.  For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost.  What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits? 

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