Question

# The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a...

The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a monopolistic firm producing different quantities of chocolate gift boxes. Fill in the blanks in the table.

 Quantity Price Total REVENUE TOTAL COST MARGINAL COST MARGINAL REVENUE 0 \$19 \$0 \$30 - - 25 18 450 205 \$7 30 510 237.5 6.5 12 35 16 272.5 10 40 15 600 312.5 8 8 45 14 630 10 50 13 650 422.5 12 4

Profit -Maximizing quantity=

Profit-maximizing price=

Profit =

Working notes:

(1) Total revenue (TR) = Price x Quantity (Q), therefore

P = TR / Q

(2) Marginal cost (MC) = Change in Total cost (TC) / Change in Q, therefore

Change in TC = MC x Change in Q

(3) Marginal revenue (MR) = Change in TR / Change in Q

(4) Profit = TR - TC

Therefore

 Q P TR TC MC MR Profit 0 19 0 30 - - -30.00 25 18 450 205 7 18 245.00 30 17 510 238 7 12 272.50 35 16 560 273 7 10 287.50 40 15 600 313 8 8 287.50 45 14 630 363 10 6 267.00 50 13 650 423 12 4 227.50

Profit is maximized when MR = MC, which holds true when MR = MC = \$8.

Profit-maximizing quantity = 40

Profit-maximizing price = \$15

Maximum profit = \$287.50

#### Earn Coins

Coins can be redeemed for fabulous gifts.