Quantity (Units) Price (Dollars) Total Revenue (Dollars) Total Cost (Dollars) To
ID: 2440541 • Letter: Q
Question
Quantity
(Units)
Price
(Dollars)
Total Revenue
(Dollars)
Total Cost
(Dollars)
Total Economic Profit
(Dollars)
Marginal Revenue
(Dollars)
Marginal Cost
(Dollars)
0
24
0
10
___
X
X
1
22
22
16
___
___
___
2
20
40
25
___
___
___
3
18
54
38
___
___
___
4
16
64
56
___
___
___
5
14
70
84
___
___
___
6
12
72
124
___
___
___
7
10
70
174
___
___
___
8
8
64
244
___
___
___
Using the table above, the profit-maximizing level of output is ______ units.
6
Please provide formula and steps
Quantity
(Units)
Price
(Dollars)
Total Revenue
(Dollars)
Total Cost
(Dollars)
Total Economic Profit
(Dollars)
Marginal Revenue
(Dollars)
Marginal Cost
(Dollars)
0
24
0
10
___
X
X
1
22
22
16
___
___
___
2
20
40
25
___
___
___
3
18
54
38
___
___
___
4
16
64
56
___
___
___
5
14
70
84
___
___
___
6
12
72
124
___
___
___
7
10
70
174
___
___
___
8
8
64
244
___
___
___
Explanation / Answer
Ans: The profit-maximizing level of output is __3____ units.
Explanation :
Profit maximization condition is , where MC = MR
or when the level of profit is maximum , MR must be greater than MC.
In the above table at the output level 3 , profit is maximum and MR is greater than MC.
Economic Profit = Total Revenue - Total Cost
Marginal Revenue = Change in Total Revenue / Change in quantity of output
Marginal Cost = Change in Total Cost / Change in quantity of output
Quantity(Units) Price
(Dollars) Total Revenue
(Dollars) Total cost
(Dollars) Total Economic Profit
(Dollars) Marginal Revenue
(Dollars) Marginal Cost
(Dollars) 0 24 0 10 -10 - - 1 22 22 16 6 22 16 2 20 40 25 15 18 9 3 18 54 38 16 14 13 4 16 64 56 8 10 18 5 14 70 84 -14 6 28 6 12 72 124 -52 2 40 7 10 70 174 -104 -2 50 8 8 64 244 -180 -6 70