COSTS Quantity Total Cost MargiaalQuantity Price Total Margi»al Cost De anded (S

Question

COSTS Quantity Total Cost MargiaalQuantity Price Total Margi»al Cost De anded (S/mit)Reve e Revene paIrs) 0 100 140 184 230 280 335 395 475 565 170 160 150 140 130 120 110 100 90 0 3 4 4 5 7 7 What is the marginal cost of the 6th pair of shoes? What is the total revenue from selling 6 pairs of shoes? What is the marginal revenue from selling the 2nd pair of shoes? If Sally uses the profit-maximizing condition MR=MC, she will maximize her profits by selling What is total profit at the profit-maximizing quantity? What are Sally's fixed costs? What is the total variable cost of production when Sally produces six pairs of shoes?

Explanation / Answer

Answer

MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p

TR=P*Q

MR of n th unit=(TR of n units -TR of p units)/(n-p)...................n>p

profit=TR-TC
The firm produces at MR=MC or the closet lower MC

Q1
MC(6)=60
Q2
TR(6)=660
Q3
MR(2)=140
Q4
Q=6
Q5
Profit=265
Q6
Fixed cost=100
Q7
TVC(6)=TC-FC=395-100=295

Q TC MC P TR MR Profit 0 100 170 0 -100 1 140 40 160 160 160 20 2 184 44 150 300 140 116 3 230 46 140 420 120 190 4 280 50 130 520 100 240 5 335 55 120 600 80 265 6 395 60 110 660 60 265 7 475 80 100 700 40 225 8 565 90 90 720 20 155

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