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  • Maximizing Profits with Marginal Analysis

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    Ruthcel Bautista
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    The document provides a table of data on output, price, variable costs, fixed costs, total costs, average fixed costs, average variable costs, average costs, marginal costs, total revenue, marginal revenue, and profit for a firm. It asks the reader to: 1) Complete the missing values in the table in bold blue font. 2) Identify the level of output that maximizes profits. 3) State the price per unit that should be charged to maximize profits.

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    The document provides a table of data on output, price, variable costs, fixed costs, total costs, average fixed costs, average variable costs, average costs, marginal costs, total revenue, marginal revenue, and profit for a firm. It asks the reader to: 1) Complete the missing values in the table in bold blue font. 2) Identify the level of output that maximizes profits. 3) State the price per unit that should be charged to maximize profits.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    97 views1 page

    Maximizing Profits with Marginal Analysis

    Uploaded by

    Ruthcel Bautista
    The document provides a table of data on output, price, variable costs, fixed costs, total costs, average fixed costs, average variable costs, average costs, marginal costs, total revenue, marginal revenue, and profit for a firm. It asks the reader to: 1) Complete the missing values in the table in bold blue font. 2) Identify the level of output that maximizes profits. 3) State the price per unit that should be charged to maximize profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Ruthcel Bautista

    M1A

    Given the following data:

    Output Price VC FC TC AFC AVC AC MC TR MR PROFIT


    0 $100 $0 $60 60 0 - 0 - 0 0 -60
    1 90 25 60 85 60 25 85 25 90 90 5
    2 80 40 60 100 30 20 50 15 160 70 60
    3 70 50 60 110 20 16.67 36.67 10 210 50 100
    4 60 70 60 130 15 17.5 32.5 20 240 30 110
    5 50 100 60 160 12 20 32 30 250 10 90
    6 40 140 60 200 10 23.33 33.33 40 240 -10 40
    7 30 190 60 250 8.57 27.14 35.71 50 210 -30 -40
    8 20 250 60 310 7.5 31.25 38.75 60 160 -50 -150

    a. Complete the table. (Please make your answers in bold, blue font, excluding the given.
    Each column is worth 5 points.)
    b. How much output should the firm produce to maximize profits? (3 points)
    ANSWER:
    The maximize profit is the MR>MC, so in the table the MR= 90 and MC= 25 is the output 1.
    The output 1 is being increasing.

    c. How much price per unit should be charged? (2 points)


    ANSWER:
    The price per unit should be charged is $90.

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