What level of output does Greensons Organic maximize profit? Justify/explain your answer and show calculations 5. When will the diminishing marginal returns start to prevail for Greensons Organic and why? 6. Identify the type of market structure Greensons Organic is operating in (perfect competition or an imperfectly competitive market). Justify your answer
Q 4 5 6
- Revenue and cost figures can be observed in the table below for Greensons Organic. Use the information in the first three columns to complete the table
|
Output /Sales |
Total Revenue (TR)
|
Total Costs (TC) |
Profit /Loss |
Marginal Revenue (MR) |
Marginal Costs (MC) |
Addition to profit |
|
0 |
0 |
8 |
-8 |
|
|
|
|
1 |
7 |
14 |
-7 |
7 |
6 |
|
|
2 |
14 |
19 |
-5 |
7 |
5 |
|
|
3 |
21 |
23 |
-2 |
7 |
4 |
|
|
4 |
28 |
26 |
2 |
7 |
3 |
|
|
5 |
35 |
28 |
7 |
7 |
2 |
|
|
6 |
42 |
31 |
11 |
7 |
3 |
|
|
7 |
49 |
38 |
11 |
7 |
7 |
|
|
8 |
56 |
48 |
8 |
7 |
10 |
|
2. Is Greensons Organic operating in the short run or in the long run? Justify your answer
3. Calculate
4. What level of output does Greensons Organic maximize profit? Justify/explain your answer and show calculations
5. When will the diminishing marginal returns start to prevail for Greensons Organic and why?
6. Identify the type of market structure Greensons Organic is operating in (
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