Homework Answers
| P | Q | TR | MR | MC | TC | PROFIT |
| 7 | 1 | 7 | 1.5 | 1.5 | 5.5 | |
| 6 | 2 | 12 | 5 | 1.5 | 3 | 9 |
| 5 | 3 | 15 | 3 | 1.5 | 4.5 | 10.5 |
| 4 | 4 | 16 | 1 | 1.5 | 6 | 10 |
| 3 | 5 | 15 | -1 | 1.5 | 7.5 | 7.5 |
| 2 | 6 | 12 | -3 | 1.5 | 9 | 3 |
| 1 | 7 | 7 | -5 | 1.5 | 10.5 | -3.5 |
a) The price that maximizes profit is found by setting MC=MR = 5
Profits = 10.5
b) The price that maximizes revenue = 4
Maximum revenue = 16
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Exercise 1. You own a firm and the demand for your products is given in the...
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p=200-5q. There is no fixed cost and the marginal cost of
production is given and it is equal to 50.
Find the total revenue function.
Find marginal revenue (MR).
Draw a graph showing inverse demand, MR, and marginal cost
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Find the quantity (q) that maximizes the profit.
Find price (p) that maximizes the profit.
Find total cost (TC), total revenue (TR), and profit made by
this firm.
Find...
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the
firm faces a constant price (P) of $60
A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 + 69Q - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this...
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