Total Fixed Variable Marginal Total Marginal Quantity Cost Cost Cost Cost Revenue Revenue $62 $62 $0 10 $90 $62 $28 $2.80 $60 $6.00 20 $110 $62 $48 $2.00 $120 $6.00 30 $126 $62 $64 $1.60 $180 $6.00 40 $144 $62 $82 $1.80 $240 $6.00 50 $166 $62 $104 $2.20 $300 $6.00 60 $192 $62 $130 $2.60 $360 $6.00 70 $224 $62 $162 $3.20 $420 $6.00 80 $264 $62 $202 $4.00 $480 $6.00 90 $324 $62 $262 $6.00 $540 $6.00 100 $404 $62 $342 $8.00 $600 $6.00

Total Fixed Variable Marginal Total Marginal Quantity Cost Cost Cost Cost Revenue Revenue $62 $62 $0 10 $90 $62 $28 $2.80 $60 $6.00 20 $110 $62 $48 $2.00 $120 $6.00 30 $126 $62 $64 $1.60 $180 $6.00 40 $144 $62 $82 $1.80 $240 $6.00 50 $166 $62 $104 $2.20 $300 $6.00 60 $192 $62 $130 $2.60 $360 $6.00 70 $224 $62 $162 $3.20 $420 $6.00 80 $264 $62 $202 $4.00 $480 $6.00 90 $324 $62 $262 $6.00 $540 $6.00 100 $404 $62 $342 $8.00 $600 $6.00

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 3MC

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Question

Suppose that the market price increases to $6, as Table shows. What would happen to the profit-maximizing output level?

Total
Fixed
Variable
Marginal
Total
Marginal
Quantity
Cost
Cost
Cost
Cost
Revenue
Revenue
$62
$62
$0
10
$90
$62
$28
$2.80
$60
$6.00
20
$110
$62
$48
$2.00
$120
$6.00
30
$126
$62
$64
$1.60
$180
$6.00
40
$144
$62
$82
$1.80
$240
$6.00
50
$166
$62
$104
$2.20
$300
$6.00
60
$192
$62
$130
$2.60
$360
$6.00
70
$224
$62
$162
$3.20
$420
$6.00
80
$264
$62
$202
$4.00
$480
$6.00
90
$324
$62
$262
$6.00
$540
$6.00
100
$404
$62
$342
$8.00
$600
$6.00

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